Back in November the Chancellor, George Osborne felt quite flush after the OBR (Office for Budget Responsibility) forecast he’d have a windfall £27 billion to spend over the next 5 years. George used it to avoid cuts in tax credits and stave off a threatened rebellion amongst Conservative backbenchers – but four months later the OBR downgraded the forecast as the world economy hadn’t grown as fast as expected.
Having already spent it George had no alternative in last month’s vbudget but to lop .5% p.a. off the current government spend of £750 billion. That way he does have a chance to meet his commitment to eliminate the fiscal deficit (difference between tax income and expenditure) by 2020. Because government spending is projected to rise to £850 billion p.a. by 2020 that represents over £4 billion of cuts in that year alone. £4.25 billion p.a. is lot of noodles and saving that will be no easy task for government departments squeezed for the previous 10 years. Delivering local services through the ‘Big Society’ initiative seems more likely than ever.
As well as cutting expenditure the Chancellor announced cuts in taxes to stimulate the economy and an immediate increase in personal allowances to £11,500 – but no increase in the Vat threshold which was a shame. Particularly good news for small businesses in Market Halls was the doubling of the threshold for 100% Small Business Rates Relief to £12,000. The Federation of Small Businesses was suitably enthusiastic and hopefully the Valuation Office and Council will now co-ordinate their paperwork.
Of course any Budget Chancellor needs a high profile, headline-grabbing announcement to stop MP’s dozing-off during the boring, fiscally bits. George opted for a ‘sugar tax’ on sweet drinks with the £520m raised going to help the NHS combat childhood obesity and fund school sport. With suspicious alacrity the School Food Campaigner Jamie Oliver was pictured jumping for joy outside Parliament. The share price of Tate & Lyle also plunged until Investors remembered their Company had sold it’s sugar business back in 2010. George made the crackingly self-righteous statement that: ‘I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: ‘I’m sorry – we knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing’. Great stuff, George, but sweetened drinks represent only a fraction of sugar consumption by kids whose processed meals mean they eat their own weight in sugar each year.
The Spring Budget came a couple of weeks after the Government failed to remove restrictions on Sunday trading to stimulate the economy. It tried to dodge an inevitable fight with the Clergy and Shopworkers Unions and the‘Keep it Special’ backbenchers by authorising local Council to approve the hours. This fooled no-one and when it offered to amend the proposals in the House of Lords if the Commons voted in favour that simply annoyed the fence-sitters. An unlikely alliance of backbench Conservatives, Labour MP’s and the SNP MP’s emerged to reject it, 317 vs. 286.
Ministers conceded the proposals would not be resurrected with planning minister Brandon Lewis announcing through gritted teeth: ‘We respect the view of the House of Parliament. The Commons has spoken and given a very clear view – we have to absolutely respect that’.
Brandon’s pronouncement was reminiscent of a famous TV comment by Dick Tuck, a would-be U.S. Democratic Senator. He sombrely conceded defeat in his California election campaign by announcing: ‘The people have spoken. The bastards’.