Some expected George Osborne to produce a big, bold, dramatic springboard of a Budget to propel the Conservatives into a commanding poll lead – and keep them there. Using some of the £23 billion of proceeds from Northern Rock, Bradford & Bingley and Lloyds – together with the opportunities provided by lower debt interest and welfare bills – for tax cuts would have been consistent with such a plan.
It would also have matched the Chancellor’s gambling instincts: after all, this is the man who staked his future and David Cameron’s on a proposed inheritance tax cut in 2007, in order to frighten Gordon Brown off from calling a General Election. And with another election due it was reported this week that Osborne indeed wanted an inheritance tax cut – for real, this time.
The Chancellor didn’t take this route, for at least one reason. Like his others, this was a Coalition Budget and not a Coalition Budget – hammered out in the Quad. The Liberal Democrats were never going to let changes to inheritance tax pass, especially when they have calculated that any benefit from the Budget is likely to be enjoyed by the main Government party.
It may also be that Osborne himself balked at throwing the dice – or that the Prime Minister did, or both – and decided to make the electioneering element of the Budget rhetorical rather than real. “Britain is walking tall again”…”from austerity to prosperity”…”the Comeback Country”. The Chancellor revelled in growth, jobs, claims of rising living standards – and drawing his beloved dividing lines in the sand.
So his windfall is to be used to hit his “original” national debt share target, and thus pave the way for a smaller eventual surplus than the one announced in his Autumn Statement – £7 billion rather than £24 billion. You may object that this is all nonsense numerology, since no-one can know what growth and revenues will be in 2020, and Osborne’s figures are thus for the birds.
Certainly, economic forecasting is a mug’s business. But that is beside the point, at least for the Chancellor who, having shunned the high road to a consistent poll lead (that’s to say, big tax cuts) is trying the low road instead (that’s to say, winning Labour-leaning voters who are worried about “cuts”, and UKIP-leaning ones who are elderly, not well off, and yearn for a return on their savings).
That’s what the allowance and ISA measures were all about. Elsewhere, Osborne played some familiar notes on the pipe: another beer cut, another fuel duty freeze, a business rates boost for Greater Manchester that marks another episode of his love affair with the city. Maybe the occupant of Number 11 has his medium-term eye not on Number 10, but on being the city’s first elected mayor.
ConservativeHome had seven policies for the Budget – headed by deficit reduction…and deficit reduction. If he had to choose two only, these were definitely the right ones. The Chancellor seems to have decided that raising National Insurance thresholds doesn’t have an electoral kick, but it would none the less be the right thing to do (as would an experiment with school investment portfolios).
He will have done nothing to boost pensions planning certainty by fiddling with the lifetime allowance in order to stuff Labour’s tuition fees scheme. But that’s Osborne for you: the political focus is unwavering. None the less, the politics of this Budget were good politics, since they built on the reputation that the Chancellor has slowly and painstakingly ground out for himself.
Among voters, the Cameron/Osborne team has built a commanding lead over the Miliband/Balls alternative. Among party members, the Chancellor has steadily climbed towards the top of this site’s Cabinet League table. Both recognise that his stewardship has helped to produce that growth and those jobs – for all the omnishambles of the 2012 Budget and failure on the deficit target.
It is as tricky to forecast poll reaction to a Budget as it is to winkle out its small print. (We will see what tomorrow brings). But there’s no reason to think that this one will open up a clear Tory poll lead – or that it will be sustained if this happens. Instead of Osborne the hare, we today got Osborne the tortoise. His gambit is to try to grind his way to victory. We will know soon enough whether it works.