Bingo! Osborne fights back
Only one event has dominated this week in Westminster. On Wednesday the Chancellor George Osborne delivered the Budget. Osborne came to the House of Commons to present his fifth Budget as Chancellor with two broad aims. The first was to spell out to the country yet again that while he has a plan for restoring the public finances, there remains plenty of work to do. The second was to prepare the ground for next year’s general election, throwing blue meat in the direction of the Conservative faithful and those tempted to leave the fold in the direction of the UK Independence party.
Friend or foe?
The Chancellor may not warm to the comparison but as the Parliament has gone on he has increasingly resembled his long-term foe. Osborne’s performance was classic Gordon Brown, from his Iron Chancellor days; some genial boasting at the start, a clunky middle section containing serious but worthy measures, and a rabbit out of the hat at the end to cheer the nation up. A penny off a pint, cheaper long-haul flights, petrol duty frozen and halving of bingo duty – it was as if the recession had never happened.
The first task for the Chancellor was to ensure that there was no repeat of the “omnishambles” of two years ago, a Budget that unravelled almost as soon as he sat down from the Despatch box. This Budget may not have met the last-minute hopes of some theatrical giveaway but this was an accomplished performance by a Chancellor keen to erase the memories of a Budget that came close to wrecking his career two years ago. Not a pasty tax or a granny tax anywhere in sight this week.
The true gist of Osborne's speech was that Britain remains a country in deep financial trouble. He promised to level with voters, and duly did so. Although growth is now accelerating, the deficit is too high and investment too low. Britain, he said, had years of catching up to do and the Budget marks the start of the long haul ahead.
His message to voters was simple; Labour left the country bankrupt and it has taken far longer than he imagined to put things right. With an election just a year away this deeply political Chancellor was never going to miss a chance to draw political dividing lines. Allowing pensioners to do what they like with their retirement savings is a political gift to the generation most likely to vote next May (queue the howls form the £12bn annuities industry). And his touted cap on welfare spending is a policy whose efficacy is untested. But for now it has the merit, from a Conservative perspective, of tying Labour in knots.
The Labour leader’s stock response was that this was not a Budget for the millions of people who had seen their living standards fall; it was “the same old Tories” who were looking after the “Chancellor’s chums”. In the run-up to polling day the bigger challenge will be for Ed Miliband, and Ed Balls, his Shadow Chancellor. They need to explain why the public should trust them to manage the economy any better. Whereas the difficulty for the Chancellor is that, having been for so long denied, the nation wants jam, which he is bound to refuse them.
This Wednesday signalled the start of the low, slow drum beat towards the next general election and was evidence that this Chancellor is not averse to borrowing a few tricks from his long-term foe.
Group Managing Director, Political Intelligence