Budget 2016: Despite the slogan there is little relief for the young generation

Mr Osborne's measures may do little to correct dangerous imbalance between today’s pensioners and young adults

Mr Osborne did remarkably little to help young adults where they need it most –on housing (iStock)

A Budget headlined by George Osborne as “putting the next generation first” was long overdue because in his six years as Chancellor, he has put the young last.

But his measures may do little to correct the dangerous imbalance between today’s pensioners and young adults. Although pensioner poverty has been virtually abolished, he left untouched perks such as the winter fuel allowance. He barely touched spending plans which will see 42 per cent of the Government’s budget go on old people and health (up from 34 per cent in 1997), while the share going to the young has fallen.

For the first time, the recently retired are wealthier than under-45s. While the state pension rises by at least 2.5 per cent each year, benefits for working age people have fallen since the 2008 crisis. Young people have seen their housing benefit cut. Maintenance grants for university students from poor families will be turned into (yet more) loans.

Despite his slogan, Mr Osborne did remarkably little to help young adults where they need it most –on housing. New incentives for under-40s to put money into a “lifetime Isa” for a home deposit or pension will help, but only in the long run. Many young adults are lucky to have any money left at the end of the month. Mr Osborne again did nothing for Generation Rent. His already announced schemes for first-time buyers are targeted at the relatively well-off rather than those at the bottom: almost one in three of the households taking up the Help to Buy programme have a total income of more than £50,000 a year and over 2,000 more than £100,000.

His approach to housing reveals the Chancellor’s real, unannounced mission. He used to accuse Gordon Brown of creating a “client state” dependent on benefits, tax credits and public sector jobs who would gratefully vote Labour. Now some Conservatives speak quietly of him building a Tory client state. The Budget brought some new building blocks. Despite the housing shortage, there was no new public housebuilding, which is out of fashion. All Mr Osborne’s eggs are in the home ownership basket.

He found room to reward natural Tory voters like those paying the 40p higher tax rate. But he also sought to extend his party’s appeal to the aspiring classes. He will spend almost four times as much on raising the personal tax allowance than helping those dragged into the 40p rate. The national living wage, kicking in at £7.20 an hour next month, is the counterpoint to Mr Brown’s tax credits, which the Tories will eventually pare back by Universal Credit. If he had wanted to help workers at the bottom, Mr Osborne would have cut their national insurance contributions, which bite on earnings of £8,000. Perhaps his judgement is that those at the bottom vote Labour or don’t bother to vote at all. It seems there are limits to David Cameron’s One Nation Conservatism and “all-out assault on poverty.”

The “client state” theory is bolstered by Mr Osborne’s mission to shrink the state he inherited from Labour. Its share of national income will fall from 45 per cent in 2010 to 36.9 per cent by 2020. One million public sector jobs have already been cut. The growth is in the private sector, with another 900,000 forecast by the OBR due to the rising population. The Chancellor abolished national insurance contributions for the 3.4m self-employed, another important Tory client group whose numbers are rising.

The Chancellor’s announcement that all schools in England will become academies free from local authority control takes another big brick out of the public sector wall. He is rolling back the frontiers of the state in a way that Margaret Thatcher would not have dared. In her day, Conservative councillors would not have allowed it. Today they are impotent.

The big question is whether Mr Osborne is building a bigger “client state” among Tory MPs so that he will be in a position to succeed Mr Cameron. His stock has fallen because of his tax credits U-turn; the Google tax controversy and the confirmation that his upbeat economic forecast only four months ago has been shredded. Tory MPs cheered his decision to freeze fuel duty as he avoided making more enemies and a likely Commons defeat if he had raised it. But there was stony silence when he made the case against Brexit, a reminder that his main rival for the succession Boris Johnson is now the front-runner.

However, the Budget’s headline-grabbing sugar tax was a clever diversion from breaking his fiscal rules, a reminder of Mr Osborne’s ability to bounce back when he is written off. If Britain votes to remain in the EU, he could still land the main prize.