Budget 2013: George Osborne says he'll level with us - but he and the Coalition are running out of time

Several familiar themes were trotted out; but inflation, a growing concern, hardly got a mention at all, and the medium-term outlook on debt and growth remains poor

Share

A very Tory budget, but at least you’ll be able to drown your sorrows if beer is your drink.

George Osborne said he wanted to be straight with us. That he was going to level with us. And what did he say? Our predecessors were awful. The global economy is awful. We’re going to stick to plan A (p.s. even if that does mean lower economic growth).

Too familiar

Correct me if I’m wrong, but haven’t we heard this before? Mr Osborne says he has an economic plan, but it sometimes looks more like an economic plan with a big dose of hope that a global recovery will provide the gravy and that the Eurozone won’t go pop and mess it all up (oops).

But he’s sweetened it with a banana or two. The decision to scrap the rise in fuel duty - I advocated this in the Independent’s Outlook column this morning - is sensible.

Rising fuel prices are contributing a great deal to rising inflation. Removing part of this inflationary stimulus makes sense, and will help to ease some of the pressure on household budgets.

And inflation remains a key concern, with no plans to abandon the 2 per cent inflation target even if the Bank of England has been paying little more than lip service to it for quite some time. If inflation were to hit four per cent, or more, (and it will rise further over the coming months) there’s precious little the Bank can do about it. It can’t hike interest rates.

With the Government planning to get further involved in the housing market, with help to raise deposits for those needing higher loan to value mortgages that banks won’t provide, that’s no bad thing. Rising interest rates leading to a sharp increases in repossessions is the nightmare scenario that keeps people awake at night.

The Government already has plans to set up a business bank. What this further move into the mortgage market raises (combined with a likely extension of the funding for lending scheme) is the following question: Wouldn’t all of this have been very much easier if ministers had nationalised Royal Bank of Scotland as the Governor of the Bank of England Sir Mervyn King has recently suggested?

Elsewhere if the Budget receives anything less than a ringing endorsement from the business lobby (with the exception of banking) then you can be sure than nothing will please them. A 20p corporation tax rate, more help for smaller businesses wanting to hire, and no more stamp duty on trading shares listed on the AIM stockmarket for growing companies.

Brutality to come

As has been widely trailed, there’s movement on housebuilding and capital spending paid for by... who? Well we don’t really know. But the next spending round will be brutal, and forgive me for being cynical about the talk of more “efficiency savings”. Every Government promises these. Delivery is a different matter.

What all these measures to help business and get the economy moving need to do is show results, and soon. The squeeze on household budgets is continuing apace and in reality there is little enough to cheer ordinary families, and those “strivers” the Chancellor and the Prime Minster like to talk about, in this budget.

Yes the first £10,000 of earnings will now be tax free - and that’s an attempt to draw the sting out of the 5p cut in the 50p top rate of tax - but unless inflation does start to ease that won’t do all that much to improve things beyond helping the Chancellor’s image a bit.

But hey, there’s a penny coming off the price of a pint - if brewers actually pass it on (I’ll believe that when I see it).

The problem with this Budget is the Government and Mr Osborne are starting to run out of time. He can bandy around figures about deficit cutting and projections about future growth from the Office for Budget Responsibility as much as he likes. They will remain just figures until people start to feel the benefit of a rising economy and stop feeling squeezed.

And we’ve yet to find out what’s going to be taken away in the next public spending round.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Senior Data Scientist (Data Mining, RSPSS, R, AI, CPLEX, SQL)

£60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Junior VB.NET Application Developer (ASP.NET, SQL, Graduate)

£28000 - £30000 per annum + Benefits + Bonus: Harrington Starr: Junior VB.NET ...

C# .NET Web Developer (ASP.NET, JavaScript, jQuery, XML, XLST)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# .NET Web De...

Day In a Page

Read Next
The woman featured in the Better Together campaign's latest video  

Tea and no sympathy: The 'Better Together' campaign's mistake is to assume it knows how women think

Jane Merrick
On alert: Security cordons around Cardiff Castle ahead of this week’s Nato summit  

Ukraine crisis: Nato is at a crossroads. Where does it go from here?

Richard Shirreff
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution