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

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
 

Errors & Omissions: Hang on – that’s not how it’s supposed to be written

Guy Keleny
Rafael Nadal is down and out, beaten by Dustin Brown at Wimbledon – but an era is not thereby ended  

Sad as it is, Rafael Nadal's decline does not mark the end of tennis's golden era

Tom Peck
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test