After George Osborne delivered his fifth Budget as Chancellor, Pagefield have put together a few of their thoughts on what he said and what it might mean…
Some proper economics
Some of those who look unkindly on announcements of this sort may call it dull, but in reality, this was a grown-up budget focused on proper economics. The changes to pensions and the energy measures were not designed to appeal to the short attention span of many voters, and instead to make real changes to important issues. However one views the policies from a political perspective, this was serious, grown up stuff and – refreshingly – reasonably free of the short-termism that has come to dominate the political landscape of our time.
Shorn of the option to introduce crowd-pleasing, election-winning tax cuts, the Chancellor instead chose to offer small wins to even smaller sections of the electorate. The measures may not grab headlines, but they will be effective on the doorstep and appeal to those voters who the Tories need to have on side if they are to have any chance of success in 2015. Clearly Osborne is banking on a surprising number of people who would consider voting for a politician who can claim victory in the war against potholes!
A rabbit out of the hat?
Much of the pre-budget chatter focused on speculation that Osborne may pull a rabbit out the hat and announce a big policy which hadn’t been pre-briefed. As it turned out, the only contender – an increase in the annual ISA limit to £15,000 – was rather disappointing from the perspective of political theatre. However, the lack of any big surprises played nicely to Osborne’s narrative of conservative consistency.
A fix for pensioners?
‘Twas ever thus with a Conservative-led Government – another Budget, another raft of measures to ensure the all-important grey vote. Not content with a triple-lock on the value of pensions and universal benefits as well as ballooning house prices for a generation that purchased property at maybe a tenth of that value, those 65 and older are now to be guaranteed a market-leading rate on a fixed-bond of up to £10,000. It is interesting that Labour were pilloried from the right when they were being seen to ‘fix’ the energy market in the favour of their key voters but that when the Conservatives are looking to ‘rig’ the financial market in the best interests of their core demographic there is relative quiet (so far). But watch this space, particularly as billions appear to have already been wiped off the value of the UK’s pension funds this afternoon.
Responding to a budget is always a tricky task, especially when it is as technical as this one was at times. Ed Miliband chose to overcome this problem by ignoring the statement altogether, and make a more general speech covering all of Labour’s key talking points. Whether this was motivated by a desire to avoid a repeat of Ed Balls’ uncertain performance at the Autumn Statement, or simply a response to Labour’s lack of detailed policy in this area, it was not a speech to live long in the memory.
The poll gap between the two main parties has closed slightly in the past month, and it will be intriguing to see whether this Budget helps retain or accelerate that trend. It may be that the lack of a big, headline announcement means it largely bypasses the British public. However, as the small but effective measures outlined today begin to take effect, it may be that this budget has a much longer, more significant impact on the polls than is first reported.
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