Personal attacks and personal allowances: the coalition's last Budget

In the last Budget of the Parliament, George Osborne claimed not to be making any pre-election giveaways, but he certainly made a few sweeteners and reminded people about the giveaways he has already made.

The Budget is a credibility battle, argues James Worron
The Budget is a credibility battle, argues James Worron
There was big news on spending, with the announcement that austerity would end a year earlier than planned: 2018 not 2019.

Osborne also announced that spending would now bottom out at 36 per cent of GDP, not 35 per cent as announced in the Autumn Statement. Thirty-five per cent would allegedly have been a viciously tight level of spending, like in the 1930s. 

It seems for Osborne one per cent makes a big difference: 36 per cent was the perfectly reasonable level of spending under Gordon Brown in 2000.

This change, together with continued pressure on the welfare budget, would mean a Tory chancellor in 2019 would have £30bn more to spend on departmental budgets than was envisaged in autumn 2014.

This is probably of great interest to anyone fighting a general election in 2020.

The Budget full document also summarised the long-term impact of alternate spending plans. 

Labour’s involve a higher level of debt. It claims this will be socially and economically beneficial. 

Osborne thinks it will be disastrous if there is another recession, which the Treasury helpfully reminds us happens every eight years on average.

Osborne’s strategy for this election in the meantime was simple. 

He aimed to strike a balance between sharing the rewards of growth and being a prudent guardian of the nation’s long-term prosperity. 

He did have some giveaways in the form of fuel duty cuts, a beer duty freeze and, fairly shamelessly, a new Help to Buy ISA and the scrapping of savings tax. 

However, he also highlighted the need for economic security when the outside world is full of risk.
Economic security is of course code for the danger of economic insecurity under Labour.

Whether this strategy succeeds will be determined by whether the Conservatives are trusted to deliver real improvement for what Ed Miliband calls "everyday people".

The parties are now throwing out contrasting figures on the standard of living. George says we are £900 a year better off; the Eds say we are £1,600 worse off.  

Miliband’s Budget response was fairly erratic but he zeroed in on this credibility battle, claiming it was the "Budget that would not be believed".

It is this credibility battle that explains one noticeable feature of today’s debate – the number of personal attacks. 

Osborne started it, with jibes at Miliband’s two kitchens, inheritance arrangements and relationship with his brother. 

Miliband struck back, talking of the trust-fund Chancellor and Bullingdon Prime Minister, and secret Tory plans to raise VAT and cut the NHS.

Osborne is attempting to tackle credibility by addressing the weaknesses of the Tory brand head on. 

His strategy seems to have three strands. The first strand is to stand up more for the worst-off. He celebrated progress on low pay, lower inequality and the gender pay gap.  

The second strand is to hit out at the undeserving rich: tax avoiders and the unloved big banks.

The third strand is economic, his whole nation agenda. 

Osborne has a ‘Hezza’ style industrial strategy, with zones, catapults and hubs supporting hip ideas such as the sharing economy and the internet of things.  This links into the Northern Powerhouse and devolution agendas. 

This is Osborne the statesman striking deals with Labour councils.

None of this will change the reputation of the Conservative party overnight, but Osborne makes progress by initiating the conversation and delivering the policies. 

Labour is very confident that none of this is credible. 

It is convinced that the introduction of the bedroom tax and the reduction in the 50p top tax rate put the Conservatives beyond the pale.

Meanwhile the everyday people, judging by the polls at least, still cannot quite decide.

James Worron is an associate partner at Instinctif Partners 

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