Budget: Chancellor condones the Finance Villains

Same again

Budget day gave me the chance to watch it live for the first time and it was quite a spectacle. The Chancellor, George Osborne, spoke with growing authority and offered us a rose garden. Ed Milliband challenged this interpretation suggesting that it was more a bed of thorns. He displayed more passion than I have ever seen him before. Even Vince Cable, standing in the aisle sniggered at some of the insults fired at the PM and Chancellor, they were cast as characters from Downton Abbey in what Miliband described as a fly on the wall documentary.

The analysts spent the next couple of hours trying to understand the small print and the giveaways were disassembled to show no long-term benefits. This was a neutral budget with a redistribution of tax benefits for the very rich (5% off tax for those earning more than £150k and £220 per annum extra for the working poor.) The strangest quirk was the Chancellor claiming that reducing the higher rate tax from 50% to 45% would generate more tax because the super-rich employed accountants to evade paying the 50% tax. 

He also claimed that the government would take more tax from expensive properties worth more than £2m. These properties comprise no more than 0.1% of all properties and the tax is mainly paid by companies. The more likely effect might be the devaluation of some of these properties below the £2m threshold and the estate agent's fees. What was not said during the Chancellor's speech was that additional tax relief for pensioners was to be withdrawn or that duty on alcohol was going up at inflation plus 2%.

The Chancellor seems to live in fantasy land when he sets out his version of a brave new Britain. There was no acknowledgment of youth unemployment, the withdrawal of benefits, the further round of public expenditure cuts, the fact that the economy was still stagnating or that the national debt was still rising.

The overall impression is that this was a budget that lacked any consistent logic other than to stagnate wages, reduce public expenditure and allow the financial sector a free ride. I am increasingly concerned that the financial sector, not content with robbing us of our pensions and selling us all sorts of dodgy products, seems to have the Chancellor by the short and curlies.