Wednesday, 8 July 2015

First Tory budget of the millennium

George Osborne has given our country the first all-Tory budget of the millennium. It's been called his "big budget". 

Here's the really big bit: it's a budget for a consumption-led recovery, not an export-led recovery. It's less austere. It costs £83n more than the last one. And it's lukewarm on capital spending. 

Labour's interim leader (not the shadow chancellor) is accordingly focusing their response on the lack of infrastructure plans. No 3rd runway. No acceleration of rail investment. A very long-term announcement on roads. 

Not so with wages and jobs. Who'd have thought: a Conservative living wage? Labour had a collective convulsion. Their raison d'être has just gone out the window. It'll throw their already frantic search for direction into outright disarray.

Culturally, the Tories are throwing major punches at the UK's 'benefits culture' – future generations will miss the humour of Little Britain's Vicky Pollard and her six-baby pram. It's designed to redress the perception that poorer (i.e. less productive) families grow larger than richer (i.e. more productive) ones. Dogmatic? Quite possibly.

Politically, the budget is a coup. Tory backbenchers happy, middle England impressed, march stolen on Labour.

Economically, it's less clear. Budgetary eggs have been moved from the infrastructure-led basket to the internal-consumption-led basket. It's a bit of an about turn. After all, the world economy isn't buying and Greece is in crisis.

Is it ultimately a wise change in tack? Time will tell. In fact, with that Greek crisis in mind, it might start telling us pretty quickly.

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