This amounted to a pretty feeble Budget from an increasingly embattled chancellor. His initial plan to eliminate the deficit by the end of this Parliament now looks like a mere pipe dream from a faraway land. The government is overspending by well over £100bn per annum and will probably continue to do so for the next few years.
The coalition hasn’t followed the lessons of successful fiscal consolidations in other developed countries – act early, decisively and dramatically. Don’t attempt to make savings by salami-slicing individual departmental budgets, but find whole areas of state spending you are willing to axe. It is almost as if George Osborne believed that tough political talk and aggressive rhetoric would be enough to solve the deficit problem he inherited. Instead, having only found feeble savings in overall spending and having based his strategy on wildly optimistic economic growth forecasts, the chancellor finds himself with no room to make the sizable tax reductions the economy badly needs.
In opposition, Osborne made it plain that he believed in flatter, simpler taxes. He has either changed his beliefs or is drawing up his budgets based on somebody else’s. Taxes are tending to get steeper not flatter, and he seems incapable of resisting a range of tweaks and fiddles that pile ever-increasing pages onto Britain’s bloated tax code.
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