i Editor's Letter: The Impending Budget

 

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The Independent Online

 

This week’s political headlines will  be dominated by the events of Wednesday, when George Osborne rises in the House of Commons to deliver a very political budget – the last substantial financial act before next May’s general election, when the Conservatives will ask the public for a mandate to govern without the handbrake of coalition.

The Chancellor will hammer the message that public austerity will continue long into the next Parliament. But his downbeat tone will not tell the whole story. Mr Osborne is proud of his work in government, of the 1.6 million private-sector jobs  created during the Coalition and the return of economic growth.

His fear that the Tories are widely seen as the party of the rich means he will target tax cuts at the lowest paid, lifting the threshold for income tax to £10,500, up from £6,475 when the Coalition took over four years ago. Instead of finding himself praised, Mr Osborne is taking fire from his own side, many of whom would prefer tax breaks for middle earners who have been dragged into the higher 40p band. (It kicks in at £42,150pa and affects 4.4 million people, up from 3 million when Mr Osborne entered the Treasury.)

Yesterday brought the latest salvo against the Chancellor: leaked remarks from a private meeting in his Downing Street office, when he is reported to have told Tory colleagues not to worry about so many potential supporters paying tax at the 40p rate, because it makes them “feel they are a success and joining the aspirational classes” and “more likely to think like Conservatives and vote Conservative”. A horrified silence is supposed to have fallen over the gathering. Dangerous words for a rich man who will one day be a baronet and who has been (slightly unfairly) caricatured by some on his own side as Louis XVI powdered noblesse.

As for the impact of the Budget in the real world: this Thursday’s i will contain carefully distilled coverage of what Mr Osborne’s announcements mean for you.

i@independent.co.uk

Twitter.com: @olyduff

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