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A Desperate Budget

John Rentoul

Osborne 3 874218359939824 300x225 A Desperate BudgetNo good will come of it. That was a desperate Budget. A cut in employers’ National Insurance contributions for small companies, worth up to £2,000 a year for each employer (but not the employers of nannies). Paid for by some tax-that-isn’t-a-tax on the second state pension in 2016.

A cut in beer duty and a freeze in petrol duty paid for by a raid on departmental underspends.

A carefully-phrased note to the new Governor of the Bank of England telling him that he needn’t worry about hitting the inflation target, as long as he doesn’t tell anyone.

And a scheme to put government-backed debt into the housing market that Iain Martin rightly describes as “borderline bonkers”.

Osborne must know that it won’t make housing more “affordable” – quite the contrary – which makes the cynicism of “Help to Buy” quite indefensible. Presumably he calculates that higher prices will make people feel better and spend more; at the margin they might give housebuilders more of an incentive to find anywhere in the south-east that will give them planning permission.

But if he wanted to use the housing market as an engine of growth he needed to cut stamp duty, which is the real disincentive to people moving, and the big suppressor of the purchase of fixtures, fittings and furnishings that goes with moving home.

Look out for my “What He Said And What He Meant” commentary on the Chancellor’s speech in The Independent’s top-quality coverage tomorrow.

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  • JohnJustice

    This budget can be summed up as

    LET THEM DRINK BEER

    Marie Antoinette’s similar phrase regarding cake brought about the French Revolution.

    Oh well, there’s always hope.

    (this is a more explicit version of my comment on a previous post)

  • Pacificweather

    His party got 36% of the vote. Why would he be looking after the 64% who did not vote for it.


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