PICK AND MIX
You’ll look for an ideological thread in the Chancellor’s budget in vain. On the one hand he regards it as acceptable to cut disabled benefits whilst cutting Corporation Tax again. On the other hand the sugar tax is an intervention in the free market that met with the immediate approval of Jeremy Corbyn.
Then there was the missed opportunity to increase petrol duty at a time when the slump in world oil prices meant motorists would hardly have noticed. He didn’t do it apparently so as to appease Tory backbenchers who he wants to vote for him for leader. But earlier in his speech he referred to the Office of Budget Responsibility’s warning that leaving the EU would lead to “disruptive uncertainty.” The OBR are right, Osborne was right to refer to the biggest issue that could disrupt his Budget strategy, but it didn’t go down well with many of those Tory backbenchers.
It was a complex, somewhat incoherent Budget which nonetheless had some good things in it for small business and the Northern Powerhouse. I thought the Leeds-Manchester rail line had been given the go-head a few times already but, anyway, it was in the Budget along with creating a 4 lane M62 over the Pennines. News that a case will be developed for a Manchester-Sheffield road tunnel is good news too. Greater Manchester once again gets more powers, this time over justice issues. But ominously whilst elected mayoral deals were announced for some rural areas, there was silence on Leeds, Greater Yorkshire and Cumbria. Knowsley is to get the northern Shakespeare Theatre which is brilliant and a reward for the lobbying work of local MP George Howarth. Perhaps he could play Lear in the first production!
SMALL BUSINESS BONANZA.
600,000 small businesses will pay zero rates from next year when the payment threshold is lifted £15000. This is even higher than campaigners were hoping for but there was more good news in George Osborne’s red box. The annual rise in business rates will in future be pegged to the consumer price index rather than the higher retail price index. There are also likely to be more frequent reviews. Due to government delays, businesses are still paying tax based on property values dating back to the financial crisis.
The elected mayors of Greater Manchester and the Liverpool City Region are to be given full powers over spending business rates but there is a downside for them and all local government. Town Halls will soon depend on business rates for their income rather than central grant. If Chancellor’s keep reducing the rates, council services will suffer further.
They will anyway because the Chancellor is looking for another £3.5bn of public spending cuts in 2019 as part of his desperate attempt to leap from a deficit of £20bn in 2019 to a surplus of £10bn in election year.
By then, the theory goes, George Osborne will be Prime Minister. There are just the little problems of Brexit, Boris and the good old British economy in the way.