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| Osborne ends Britain's big squeeze | Osborne ends Britain's big squeeze |
| (35 minutes later) | |
| So it turns out George Osborne did not need LibDems in government to tell him to take off his hair shirt. | So it turns out George Osborne did not need LibDems in government to tell him to take off his hair shirt. |
| Because today's Budget is massively less austere than the one forged with them in March, just before the election. | |
| By the end of the parliament the chancellor is now planning to cut public services by just under £18bn a year. Which is not trivial but is considerably less than half the £42bn in cuts he had been proposing by 2019-20. | By the end of the parliament the chancellor is now planning to cut public services by just under £18bn a year. Which is not trivial but is considerably less than half the £42bn in cuts he had been proposing by 2019-20. |
| These are no longer cuts viewed by most economists and politicians as madly ideological and unrealistic. | These are no longer cuts viewed by most economists and politicians as madly ideological and unrealistic. |
| How and why the lesser squeeze? | How and why the lesser squeeze? |
| Well for all George Osborne's rhetoric that he's a low tax chancellor, he actually announced tax rises that will raise him £47bn over the next five years, according to his own creation, the Office for Budget Responsibility. | Well for all George Osborne's rhetoric that he's a low tax chancellor, he actually announced tax rises that will raise him £47bn over the next five years, according to his own creation, the Office for Budget Responsibility. |
| Those tax rises include around £2bn a year from the reform of dividend tax and £1.5bn per annum from a hike in insurance premium tax. | Those tax rises include around £2bn a year from the reform of dividend tax and £1.5bn per annum from a hike in insurance premium tax. |
| Those tax rises contrast with just £25bn given away with populist increases in the tax-free and 40% income-tax thresholds, and a promised two percentage point reduction in the headline rate of corporation tax (and, by the way, with a pledged corporation tax rate of 18%, some competitor countries may start to see Britain as almost a tax haven for multinationals). | Those tax rises contrast with just £25bn given away with populist increases in the tax-free and 40% income-tax thresholds, and a promised two percentage point reduction in the headline rate of corporation tax (and, by the way, with a pledged corporation tax rate of 18%, some competitor countries may start to see Britain as almost a tax haven for multinationals). |
| Mending the roof | Mending the roof |
| Two other big points are worth making. | Two other big points are worth making. |
| The £12bn of welfare and social security cuts are being phased in over four years rather than two. But they will still be extremely painful for millions of people, especially middle-income families - who will take much of the strain of tax-credit reforms that will raise around £4.5bn every year. | The £12bn of welfare and social security cuts are being phased in over four years rather than two. But they will still be extremely painful for millions of people, especially middle-income families - who will take much of the strain of tax-credit reforms that will raise around £4.5bn every year. |
| Also George Osborne is not mending Britain's roof in the sunshine - to employ his favourite cliché - as quickly as he said he would in the pre-election spring. | Also George Osborne is not mending Britain's roof in the sunshine - to employ his favourite cliché - as quickly as he said he would in the pre-election spring. |
| Then he promised he would be spending less than he raises from taxes by 2018-19. This afternoon that surplus was postponed to 2019-20. | Then he promised he would be spending less than he raises from taxes by 2018-19. This afternoon that surplus was postponed to 2019-20. |
| And the OBR says the national debt will be £18bn higher by 2020 than promised in March, with £3.5bn of this extra borrowing directly traceable to today's budget decisions. | And the OBR says the national debt will be £18bn higher by 2020 than promised in March, with £3.5bn of this extra borrowing directly traceable to today's budget decisions. |
| Oh and it is also quite striking that a Tory government that says it fervently believes in markets is behaving like 1970s Labour, in creating a new official living wage - because it represents an attempt to fix the price of most businesses' most important cost, people, significantly higher than the current minimum wage. | Oh and it is also quite striking that a Tory government that says it fervently believes in markets is behaving like 1970s Labour, in creating a new official living wage - because it represents an attempt to fix the price of most businesses' most important cost, people, significantly higher than the current minimum wage. |