George Osborne is often portrayed as a political conjuror, a Chancellor who likes to have one or two tricks up his sleeve. I have often wondered about the caricature. The great political conjurors are perceived as utterly straight, that is their great trick. Those who are seen as devious cannot be, or else they would not have allowed such a perception to form.
Conjuror or not, Osborne had very little space to wave a wand yesterday. All the tricks, if that is what they were, had been announced in advance. There were, though, two minor and significant surprises. In his suspiciously convoluted explanation about the top rate of tax, Osborne revealed that it had raised £1bn in the first year. This is more or less what was predicted when the tax rise was announced. Almost certainly that figure would have risen considerably in succeeding years. But this is not a government that spends too much time analysing the evidence before rushing into a policy announcement. Prematurely, and with information that is unreliable, the Chancellor has leapt.
Given that Osborne is not implementing the cut for another 12 months, he could have waited to discover more about the medium-term impact of the rise. Because of the policy's accessible simplicity and powerful symbolism his Budget will be remembered above all as the one in which he cut the top rate of tax for the rich.
That his Budget will be partly defined by the contentious top rate tax cut, small in the great scheme of things, is the other minor surprise. The conjuror's bag might have contained no new tricks, but part of a Chancellor's art on Budget day is to weave a compelling narrative around a range of unavoidably disparate policies, to cast a spell that gives the impression of mesmeric mastery and coherence. Instead, the Budget felt like what it was, fiscally neutral, with money moving around here and there for contradictory purposes: a clampdown on tax avoidance here, the dropping of the 50p rate there, on the grounds that earners avoided paying it and there was nothing that could be done to stop them; hailing a cut for top earners, while insisting that they will pay five times more in tax than they do now.
There are radical policies to come, but the detail was lacking. The clampdown on tax avoidance in the form of a so-called Tycoon Tax will be applied next year and not this. According to senior Lib Dem sources, Osborne was going to describe the policy as a Tycoon Tax but dropped the phrase at the last moment after Nick Clegg had portrayed the new mechanism in such terms earlier this month. Both term and detail are a long way from taking hold.
The deregulation of planning laws will be published next week after considerable internal dissent and a campaign of opposition from The Daily Telegraph, a powerful opponent. Again, we await the precise details. The targeting of child benefit is applied tentatively, but represents an end to a universal benefit. On another ambitious and historic move, the end of universal pay bargaining – once more, the devil will be in the detail and might end up costing the Government more.
Perhaps the context defied a coherent, spellbinding narrative. Osborne has already made his big call with his deficit reduction strategy. As a self-described fiscal conservative and monetary activist, he resolved long ago to place faith in his austerity programme and activism from the Bank of England in the form of low interest rates and so called Quantitative Easing. The big decision then, and the unavoidably incremental policies now, place him in a curious political position. In the summer and autumn of 2010, Osborne argued that the UK was as fragile as Greece, something of a self-fulfilling observation. At the time, the economy was growing slightly faster than it is now.
And yet, after nearly two years as Chancellor, Osborne has no choice but to sound more upbeat. No longer are there comparisons with Greece, but instead there is a projection of optimistic energy; a country that is earning its way out of trouble, as he put it. Such tonal optimism could not disguise that this was a Budget in which he was not spending an additional penny of spare cash, or choosing not to do so.
For chancellors, fiscally neutral Budgets are the most dangerous. They do not have room to do anything, but feel obliged to do rather a lot. From his own perspective, I find it baffling that Osborne felt the need to cut the top rate. On the whole, a leader of the opposition needs ammunition from a government in order to make his mark. Ed Miliband was authentically convincing in his response yesterday because he is genuinely surprised that Osborne made the move (obviously he was not taken aback yesterday, but when the news was leaked last week). Perhaps Osborne felt he had to offer a policy to right-wing Tory MPs that was tangibly and recognisably one that they were calling for and the Lib Dems were not. More widely, the Chancellor has made a calculation that this, a mid-term Budget, is the last one when he can make some tough, risky calls. Next year and the year after, he will hope to be more generous as the election moves into view, although it is not easy to see where the leeway will come.
For Nick Clegg and his party, the political objective is easy to set but difficult to achieve. He seeks credit for the fairer policies while establishing distance from the 50p cut. They have some chance of doing so because they have made clear publicly that their focus was on low and middle earners, and that they did not want the top rate cut. Privately, they have been even more emphatic. Their association with the NHS reform Bill is far more dangerous for them.
For Cameron and Osborne, parts of the Budget join the NHS reform as a challenge to their claims to occupy the centre ground. Yesterday's Budget had echoes of some of those delivered in the 1980s, although presented in an unrecognisably different political and economic context. Miliband suggested it showed they were the same old Tories. There are many questions for Labour to answer on the economy, but if that message starts to take hold, Osborne and Cameron will not win elections like those same old Tories did in the 1980s.