budget-2015

Budget 2015

Last year’s Autumn Statement opened up an opportunity in the political landscape for the Labour Party. Helped by the Office for Budget Responsibility’s (OBR) suggestion that George Osborne’s planned spending would be the lowest as a proportion of GDP since the 1930s, Labour were able to go on the offensive. The Conservative-led government was portrayed as being on an ideological mission to slash the state and Labour were able to tread the middle ground between responsible deficit reduction and investment in public services.

Yesterday, however, came the Chancellor’s chance to gain on Labour’s political ground and neutralise possible Opposition attack lines. The goal in the Autumn Statement of having in place a £23bn surplus by 2019 had disappeared, now revised down to £7bn. This retreat was designed to pull the rug from under Labour’s line about public spending being slashed to 1930s levels. At the same time, George Osborne also made regional development front and centre of his Budget, beating his “Northern Powerhouse” drum to drown out Labour accusations that his recovery was only really felt by London and the South East.

Meanwhile, measures against the banks and tax avoiders were presented as having the potential to raise billions over the next five years, and similarly crowd pleasing commitments were announced, such as the increase of the personal tax allowance to £11,000 by 2017/18 (the fact this is also a Liberal Democrat policy being conveniently ignored) and the creation of a Help to Buy ISA. That this policy will do nothing to address the major supply-side problems in the housing market – a lack of affordable homes being built in the first place – was picked up by a number of commentators.

A “no gimmicks” budget

The Chancellor had promised “no gimmicks” and, largely, delivered on this. The Budget contained few surprises and no game-changing new policies. It was a Budget carefully orchestrated to cultivate optimism to match the government benches’ celebrations of fiscal responsibility. The Chancellor’s rhetoric had little of the harshness of the Autumn Statement, showing light at the end of the tunnel and hinting towards a relaxation of austerity – albeit not until 2019.

On the surface, then, it looked like a difficult Budget for Labour to respond to. However, the Opposition stance, given in news studios and on breakfast TV sofas the following day was relaxed - because one thing the Budget demonstrated was a Chancellor on the defensive.

Rather than taking ownership of the Conservative’s strict fiscal policy as he did in the Autumn Statement, Mr Osborne tempered it to make it more palatable to voters and less vulnerable to Labour attacks. It was a deeply political Budget that nakedly sought to mollify key Conservative audiences like the wealthy retired and aspirant home-owners. But, equally, it was a Budget that sought not to ruffle too many feathers ahead of what is the most unpredictable general election in years.

The 2015 Budget and the General Election

Though it contained many niceties (as well as some amusingly niche promises, such as the £250,000 commitment to fund research into anti-social seagull behaviour), the Budget had none of the rabbit-pulling that Labour might have been fearing: no big ticket, populist policy that could act as a real game changer. This Budget was vanilla - a continuation of the Conservatives’ electoral strategy so far.

Yet therein lies the weakness of the Budget: as long as the Conservatives’ “Long Term Economic Plan” remains fundamental to their election campaign, Labour’s lines of attack about callousness and a recovery for the elite cannot truly be closed off. Mr Osborne has managed to  defend himself from these charges with reasonable skill so far, but as the election campaign rolls on Labour will have more and more opportunities to attack the perceived savagery of Conservative spending plans and the unfairness of austerity. 

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