Newspaper article The Evening Standard (London, England)

Feelgood Budget for the Election Battleground

Newspaper article The Evening Standard (London, England)

Feelgood Budget for the Election Battleground

Article excerpt

THE Chancellor began today's Budget speech, perhaps his last, buoyed by positive economic figures. The Office for Budget Responsibility's forecast for growth this year has been revised up since to 2.5 per cent, fractionally down on last year's 2.6 per cent. Today's unemployment figures show that the jobless rate fell to 5.7 per cent in the three months to January, the lowest level since June 2008. Interest rates are about as low as they could be, as is inflation. The economy is strong enough for him to claim plausibly that his Plan A worked. Britain, the Chancellor said, is "growing, creating jobs and paying its way".

Certainly it has taken longer to get to this point than George Osborne predicted in 2010: his original growth forecasts then for this year and last were higher than the result turned out. And the argument over the fruits of the recovery continues: the Chancellor was at pains today to claim that households are better off now in 2010, though Labour disagrees. This was unashamedly a Budget engineered primarily with the Tories' re-election in mind.

To that end, the Chancellor's forecast surplus for 2019/20 of PS23 billion has been cut to PS7 billion, giving him more to play with. He emphasised that his planned cuts in the next Parliament will not reduce spending too far: by 2019/20 it will be the same as in 2000, he claimed, "a state neither smaller than we need nor bigger than we can afford". He hammered away at Labour's "irresponsibility", cultivating his own image of fiscal responsibility as ever despite substantially increasing borrowing, to borrowing PS90.2 billion this year, far ahead of the forecast in Alistair Darling's last Budget for Labour. He said he will find PS30 billion of savings from government departments (PS13 billion), welfare (PS12 billion) and tax avoidance (PS5 billion). And he was keen too to spike Labour's guns by appearing to soak the rich: the banking levy will rise to 0.21 per cent, there will be a "Google tax" on foreign multinationals, and the lifetime limit on pensions will fall from PS1. …

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