A confident performance from the Chancellor as he delivers his eighth budget – setting out a scene of growing British confidence against and increasingly tumultuous global market. Office for Budget Responsibility (OBR) downward revisions of growth were, he argued, indicative of international pressures, and the UK is set to have the highest growth (2% in 1016 to 2.2% 2017) of any developed country.
A solid increase in employment figures, announced during PMQs, set the scene, and Osborne confidently drew out his narrative arc. Unity as Great Britain and as part of the EU formed a key theme. ‘Better together’ tripped off the tongue, as did ‘long term economic plan’. This was a stabilising budget, a future proofing budget, a budget for subsequent generations.
Bidding for international investment the lowest corporation tax in the G20 is dropping even lower to 17%, and lessons have clearly been learnt as golden handshakes and multinational tax avoidance will see a firm clampdown.
Government supplemented ISAs, personal allowance and higher rate threshold rises, and clampdowns on big multinationals are all broad crowd pleasers. Wide-reaching infrastructure reviews push for a less London-centric view, while social reforms such as homelessness and veterans’ care are carefully crafted touches.
The controversial stories will be the wholesale change to education – from the death of the comprehensive system and the lengthening of school hours – as well as an added focus on sports with money coming from the artfully named ‘sugar levy’. Certain to be rebranded Jamie’s Tax, the scalable levy will target varying levels of sugar content in drinks. These measures are designed to push for best outcomes for young people by securing education and health. However, Osborne’s last dalliance with popular foodstuffs saw him burnt with the pasty tax, and if manufactures decided to pass on the costs to buyers (predicted at up to 8p per can) then this will likely occur again.
Fuel, beer and spirit duty remained untouched, leaving some uneasy about when the continuing cuts will begin to bite.
This is Osborne’s swansong as Chancellor – a Referendum and a leadership contest will see him likely to shift seat at the next Budget. Whether that is to his left or to the backbenches could depend on how his measures are received today.
To see our entire breakdown see The PR Office’s 2016 Budget Breakdown