David Prosser: It is the poor who will contribute the most to repairing our finances

If people think Mr Osborne is not being honest about who will bear the brunt of his plans, he will losesupport

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Page 40 of
Budget 2010, the so-called "red book" that HM Treasury publishes alongside every Chancellor's speech: that is where you will find the clearest verdict on George Osborne's claim yesterday that the rich will contribute more than the poor to the cost of repairing Britain's battered public finances. And it must be said that the data on that page, an estimate of the revenue raised or given up as a result of each Budget measure, does not back him up.

Note, for example, the additional revenue raised by the VAT hike – upwards of £12bn annually from next year onwards – which is by far the biggest single contributor to the effort to cut the deficit. VAT hits everyone, of course, but takes no account of ability to pay.

Alternatively, take a look at the other side of the coin, those spending cuts Mr Osborne expects to do most of the deficit reduction work. We'll have £2bn of benefit cuts next year, rising to almost £5bn in 2012 and to £8bn in 2013. Some of that will come from middle- and higher earners – frozen child benefit, say, though higher-rate taxpayers have not lost the cash altogether, as many predicted – but cuts to tax credits, lower benefit increases, housing benefit reform and the abolition of initiatives such as the savings gateway will all hit those on the lowest incomes.

What about measures you might consider as targeted exclusively at the rich? Well, there's the levy on the banks, which will eventually raise £2.5bn a year. It's not to be sniffed at, but the limited scale of the levy prompted an almost audible sigh of relief in the City – and a bounce in the share prices of our biggest banks in the moments after Mr Osborne's announcement.

Then there's that capital gains tax hike. We shouldn't make the mistake of assuming that everyone who pays CGT lives on millionaire's row, but it is undoubtedly a tax that is more likely to hit the well-heeled. They have got away lightly with a 28 per cent rate – most of those affected had been expecting 40 per cent or higher.

It is a similar story on business tax. Many businesses will be delighted with the cuts in corporation tax Mr Osborne announced. The red book tells us they will cost £4.1bn by 2014, with much of the money to pay for that lost revenue coming from much lower capital allowances. That's effectively a subsidy from the poor man of the private sector – the manufacturing industry – to better-off relations.

Now, it may be there is a logical argument to make for all of these changes. The bank levy will eventually be supplemented with a transactions tax while higher CGT rates, Mr Osborne says, would see avoidance result in a lower take. As for benefits, there is a case to be made for the reform of both housing benefit and disability living allowance. And it may be better to tackle low incomes by raising the income tax threshold rather than through complicated tax credits.

Still, the Chancellor is in danger of falling into a trap. He is fond of quoting the Canadian example of the 1990s, which saw the Government persuade the public to accept austerity measures as a necessary evil by being upfront about its plans and even asking for people's suggestions. If the suspicion is that Mr Osborne is not being entirely honest about who will bear the brunt of his deficit reduction plans, winning public support for his proposals will be harder.

In fact, while this Budget marked a radical departure on the Labour packages of the past 13 years in many ways, it fell short of the much vaunted "new politics" in that Mr Osborne has been no less deceptive than his predecessors.

One example has particular resonance. Remember Alistair Darling's national insurance hike for employers, the "tax on jobs" that dominated the first week of the general election campaign? Well, we knew Mr Osborne intended to keep that levy, but the Chancellor has made much of his intention to raise the threshold at which employers begin paying national insurance to compensate for it. The red book shows that compensation will give employers a £3.1bn benefit next year, compared to the £4.5bn cost of the higher rate. We have a net £1.4bn tax on jobs, in other words.

Does it matter that Mr Osborne has attempted to paint this Budget as fairer and less difficult than the figures suggest? It was ever thus, after all.

This time, however, one wonders if, in addition to a sceptical public, the Chancellor hopes his presentational efforts will convince those Liberal Democrats who have not bought into coalition quite as wholeheartedly as their leaders.

Some more numbers may make that more difficult. In planning for government, Mr Osborne always said that spending cuts would do 80 per cent of the deficit-reduction work while tax rises would account for 20 per cent. The ratio we got from yesterday's Budget was 77 per cent to 23 per cent. The 3 percentage point swing to higher taxation may not be enough for those Liberal Democrats who hoped that coalition government would protect Britons, particularly those on the lowest incomes, from the Conservatives' natural instincts on public spending.

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