For a chancellor announcing lower economic growth forecasts and missed fiscal targets, George Osborne managed a remarkably upbeat tone as he presented his budget to the House of Commons yesterday.
Describing “a dangerous cocktail of risks” that includes turbulent financial markets, low productivity growth in the West and a weak global economy, he said Britain was resilient enough to deal with all the challenges. The country was on course to grow faster than any other major advanced economy in the world, the chancellor said, before announcing details of dramatically downgraded growth forecasts for the next few years.
Against this backdrop of lower domestic growth and poor global prospects, Osborne’s claim that he would still eliminate the deficit by 2019/20 has been greeted with some scepticism.
Nimble politician
The chancellor is, however, a nimble politician who has missed targets and retreated from unpopular policy decisions in the past without paying a political price. He needed all his agility yesterday because in drawing up his budget, he was unusually constrained politically as well as fiscally.
Britain's referendum on EU membership on June 23rd hangs like a dark cloud over Westminster, paralysing political action as the government seeks to avoid any measure that could alienate a key voter group. Osborne is, after the prime minister David Cameron, the politician most closely associated with the campaign to keep Britain inside the EU. He is also a frontrunner to succeed Cameron if the referendum goes the way both men want it.
With up to half of Conservative MPs favouring Brexit, the chancellor was expected to step gingerly around the issue during his budget speech. Instead, he told the House that even Britain's slower than forecast economic growth would be at risk if the country left the EU. "Britain will be stronger, safer and better off inside a reformed European Union. I believe we should not put at risk all the hard work that the British people have done to make our country strong again," he said.
Many of the budget’s spending plans had already been trailed in the media, including an expansion of the rail network and the introduction of longer days at some schools. But Osborne’s levy on sugary drinks made for a headline-grabbing announcement which trumped the dry detail of economic forecasts in most reports. It also allowed the chancellor to strike a high moral tone.
‘Sugary drinks’
“I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing,” he said.
Labour leader Jeremy Corbyn had one of the most difficult duties of the parliamentary calendar, responding to a budget speech of which he had no prior sight. He performed the task well, making a well-reasoned case that the budget was both unfair and the culmination of the chancellor's failures over the past six years.
