EDITOR'S LETTERMerryn Somerset Webb
Osborne’s Budget bribes
When Chancellor George Osborne stood up to give the last Budget of this government this week, he described a country I really want to live in. One that is working on cutting its risk by bringing the size of the state back to a level that can be financed by its tax take. One with an economy rebalancing away from financial engineering and towards productive business; away from the south towards the north (apparently a job is being created in the Midlands every ten minutes); and away from humouring the non-productive via the overblown welfare state in favour of rewarding the productive. And one in which budget gimmicks and giveaways have been dumped in favour of fiscal discipline. The sun is starting to shine on the UK, he said, “and we’re fixing the roof”. It was a pretty good start.
But the actual Budget didn’t live up to the promise. First, look at how much the UK still overspends. In 2014, central government expenditure per person was around £10,000. But revenues came in at only £9,235 per person. So, even in Osborne’s new world of fiscal responsibility, we spend £765 per person more than we get in tax revenues, says the Economic Research Council. That doesn’t include the state’s unfunded liabilities, and at some point we have to pay down the actual debt too. Osborne has made a good start, but as several commentators have noted, even as he fixes the roof he needs to remember our foundations are still pretty shaky too.
• Read the full editor’s letter here: Osborne’s Budget bribes