The words of Radiohead’s song ‘No Surprises’ may prove to be a good predictor of Wednesday’s Budget. “A heart that’s full up like a landfill; A job that slowly kills you; Bruises that won’t heal” …… but please don’t take any of the other lyrics literally. Anyone actually listening to what George Osborne said on the Andrew Marr Show cannot fail to be aware that the outcome of this budget could be as potentially depressing as the song. However, some reports have said that ‘cabinet sources’ believe that George Osborne has been told not to ‘rock the boat’ ahead of the EU referendum. So how will he play his hand?
We all usually have a pretty good idea of what to expect by the time the Chancellor stands up. Goodness knows the message management machine works well enough. I thought it might be fun to summarise some of the media coverage over the weekend ahead of the actual event. And then look back at it and see how accurate it was.
Let’s start with the BBC that reports George Osborne has warned the UK needs to “act now rather than pay later”. The Chancellor told Andrew Marr he would cut “50p from every £100 the government spends” by 2020. He also said that the world was “more uncertain” than at any time since the financial crisis. Read more here.
When I was finishing writing my book, ‘How To Survive Austerity‘, the Chancellor had just delivered the conclusions of his Spending Review. I listened to what he said, read the Office for Budget Responsibility (OBR) report and wrote some words based on what I heard. Which sounds very like what the Chancellor is saying now. Of course, George Osborne may have actually read the book I sent him or maybe the message back then was not picked up by the media, or at least some parts of it.
Just a side note – that “50p in every £100” equates to around £4bn. George Osborne also claimed it was “not a huge amount in the scheme of things”. I think a lot of people may disagree with you on that one George…..
In Sunday’s Telegraph it was reported that the economy is now projected to be smaller that first forecast in November’s Autumn statement. The Chancellor faces an £18bn hole in public finances. This means the Treasury will need to make deeper spending cuts. The OBR is expected to downgrade its outlook for growth to 2.2pc in 2016 (down from 2.4pc in November). Read more here.
The Telegraph also reported Mr Osborne was going to tackle the income tax loophole in this year’s Budget. He will seek to end the abuse of ‘personal service companies’ which allow 20,000 public sector workers to reduce their bills. They have been popular with some TV presenters, sports stars as well as some highly paid school headteachers, hospital chiefs, Bank of England and Network Rail executives. What a spoilsport – expect that move to have a detrimental impact on the ability to attract leaders and expect more innovation from tax advisers. Read more here.
The FT looked at revenue-raising measures, with speculation focused on a higher tax on insurance premiums, inflation linked to fuel duty and the possibility of increasing the banks profit tax. It reports the Chancellor wants to continue his crackdown on tax avoidance by multinational companies. Yup, good luck. The FT also reported the Chancellor has been forced by Tory MPs to abandon plans to shake up pensions – not wanting anything to complicate the EU referendum campaign and all that. Read more here.
Finally on a slightly lighter note, the Independent reported that the Chancellor wasn’t very impressed with Chris Evans and Top Gear after a ‘noisy episode’ of the BBC show. He tweeted “Trying to write my Budget, despite noisy episode of @BBC-TopGear being filmed outside on Horseguards Parade. Keep it down please @achrisevans.”