Politics Takes Over And Leaves Osborne With an Empty Budget Box

When I went to find out my degree classification I joked to a friend that so predictable was the result that I would invoice the university for the shoe leather expended in my journey. So pointless was George Osborne’s eighth budget that it would not be unreasonable for those who showed up to hold a similar thought.

This was George Osborne’s most difficult budget since the bleak days of the Coalition when growth had stalled and his reputation was at a low after his 2012 “omnishambles” budget. The reasons are partly economic but mainly political. Growth projections and productivity down, debt and deficit forecasts up. He re-announced his corporation tax cut, froze the fuel duty, despite a collapse in oil prices, and announced a £520 million “sugar tax” to fund school sports. The man who blames Labour for crashing the car, now claims it is the global traffic which is hampering the speed of travel. It would be nice to think he cannot have it both ways. For all the tough words, there is as much chance of him meeting his 2019/20 surplus target as Kim Jong-un has of winning a Nobel prize. Of course, he hopes that it will be his successor who announces this and he will be safely putting up the drapes in 10 Downing Street by then.

When Cameron announced his referendum plan in 2013 he gave himself until 2017 to hold a referendum. That he conducted a hurried negotiation and announced a 23rd June referendum is an admission that government is being held up by the plebiscite. Any hope there was (slim surely?) that Cameron could have conducted a wider renegotiation was sacrificed at the altar of political expediency. Normally, at this stage in the political cycle, governments would be introducing unpopular measures in the hope that by election time the medicine would be forgiven (if not forgotten). However, the last thing the Prime Minister and Chancellor want is to lead a referendum in the midst of mid-term unpopularity. Last year's u-turn on tax credits was not only because of any leadership ambitions that George Osborne has but also to clear the decks of barnacles.

The budget was a new experience for Jeremy Corbyn, who gave his first budget response: what was noticeable was not the content but the near silence and lack of interest from his own side. The paucity of support from his parliamentary party is a problem. It also means that for the moment Osborne’s enemies are behind him not in front of him.

The Chancellor has nailed his colours, AND HIS TROUSERS, to the European mast. It will be much harder for him to climb down

Boris Johnson’s rather confused defection to Team Brexit and the fact that half of Cameron’s own party cannot support his campaign means that the Tory Party is more riven than at any time since Maastricht. It may not be quite civil war, as newspapers would like it, but it is a series of unpleasant skirmishes. Since his post-election budget Osborne’s stock has plummeted and Johnson’s has risen. The Mayor of London’s support for Brexit may be opportunistic but it has given him a base in the parliamentary party which he has previously lacked. It was perhaps with an eye to this that Osborne raised the 40p threshold to £45,000 which will benefit a tiny 14%. Such moves play well in the Daily Mail and may help to ease post-referendum tensions.

In contrast to Johnson, Osborne used his speech to put himself at the forefront of the Remainiacs with a strong attack on Brexit. The OBR’s forecasts for growth were predicated on continued EU membership, he said shamelessly. He directly linked UK growth to EU membership. The Chancellor has nailed his colours, and his trousers, to the European mast. It will be much harder for him to climb down. The question is, can Osborne both win the referendum for Remain and then take over as leader? Osborne’s was a calculation that whatever the short-term costs in the long-term the party’s future lies as a more pro-European party. Yet whether we vote in or out, the next Conservative leader may be a Brexiteer. Although three, maybe four, years away, stranger things have happened in leadership contests, as the member for Islington North can attest.

Should the UK vote to leave the European Union in June, this will be Osborne’s last budget. Like Cameron he will surely have to resign. That the biggest announcement was on education policy speaks to the emptiness of this budget. What in heaven's name is this doing in a budget speech? It was theatre and just theatre. And actually not very good theatre. Now is surely a time when we can begin to think about abandoning this absurd ritual and creating a budget process which is negotiated rationally between the executive and parliament. Osborne’s budgets have a reputation for unravelling in days, like his predecessor-but-one’s, yet  - at least in terms of dealing with the economic storms ahead - this one has little to unravel.

Economics and necessity have totally lost out to politics as he continues to stake out a centre ground politics for his party. He talked about the need for further spending cuts but he did not say where or when the axe would fall. His insistence that the UK will be in surplus by the end of this parliament defies belief. Nothing was said about the fact that child poverty looks set to rise and inequality of wealth has already started to rise. His overriding aim, it seems, is to win the referendum then win the next election. There will be headlines but this was an empty, political budget. The shame is that he will probably get away with it.

More about the author

About the author

Educated at Durham University and UCL, Graham is Disclaimer's editor and a regular contributor. He has written for numerous publications including Tribune, Out Magazine and Vice. He has also contributed to two books of political counterfactuals for Biteback Media, Prime Minister Boris (2011) and Prime Minister Corbyn (2016).

A democratic republican lefty, he struggles daily with the conflict between his ingrained senses of idealism and pragmatism.

Follow Graham on Twitter.

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