A budget with few surprises
A good budget needs a little suspense. Last week’s didn’t have any – we all knew exactly what was going to be in it long before George Osborne stood up. I had some tiny hope that there might be some last-minute drama – a flat rate of income tax for all, a commitment to cut the state’s share of GDP down to 35%, or some such.
But it wasn’t ever very likely: the public finances and the economy as a whole are still in such a dismal state that proper cuts – be they to taxes or spending – are just too terrifying for the government to contemplate.
That said, the Budget came with two interesting trends: first a small shift from taxing income to taxing wealth (something the OECD says is better for economic growth) and second, an effort to close some of the major loopholes used to avoid paying both types.
You can see these in the way Osborne cut corporation tax and income tax (both at the top and the bottom end) and substantially raised one of our many taxes on property. The sharp rise in stamp duty on £2m-plus houses is effectively the mansion tax that the Lib Dems have been after and the new duty of 15% on houses bought via a company (the old avoidance measure) will push many wealth tax avoiders back into the net.
• Read the full editor’s letter here: A budget with few surprises.