A Budget That Wants to be Prosperous, Solvent, and Free.

 Britain's Chancellor of the Exchequer (Minister of Finance) George Osborne poses with his red despatch box outside his official residence 11 Downing street in  London,  20 March 2013 prior to delivering his budget to the House of Commons, Westminster later in the day.  EPA/FACUNDO ARRIZABALAGA

It can be easy to lose track of what’s going on in UK politics this year seeing as my college studies American politics at A2. Before researching this year’s budget I could probably tell you more about the Fiscal Cliff than about how Britain’s economy was doing. Writing this was a nice way to get back into the swing of what’s going on in the UK, and so:

What is the budget?
Simple, well sort of. It’s the statement the government (specifically the Chancellor) makes which explains how the government plans to spend the money its made from taxes. What the Chancellor plans to do will pretty much affect all aspects of society and is highly important in showing the Chancellor’s strategy to get Britain out of a recession. According to Andrew Rawnsley, George Osborne confided that his biggest goal today was “to avoid fucking up the budget”. Nice confident start to the day, but Osborne had cause to be worried after the backlash he faced over the “pasty tax” in the last budget.

So, how is the economy doing?
Not great. Andrew Sparrow of The Guardian believes Osborne is “stuck in the austerity version of Groundhog Day.” Despite previous more positive forecasts, yesterday’s budget revealed that growth for this year was estimated to be at 0.6%. Osborne’s ambitions to have cut the structural deficit have now been estimated to take until 2017-18 and even then, there will only be a 70% chance of it happening. It seems that with every budget comes more apologies that the previous ones have not worked, and more promises that the new deadlines will be met. Whilst Osborne believes that “we are, slowly but surely, fixing out country’s economic problems” Ed Miliband insists that “Three years on, what does he say? Exactly what he said three years ago”. It’s hard not to agree. Just four months ago he predicted a growth of 1.2% for Britain after all. There was bittersweet news about employment for Osborne hours before the budget was announced too. It was revealed that while the number of people receiving unemployment benefit has fallen to a 20-month low, the headline of unemployment in the UK rose in the three months to January, bringing the rate of joblessness to 7.8%.

What is all the controversy over this budget?

This budget has had one exceptional drama. It is the first budget to be leaked since 1947. A junior journalist at the Evening Standard tweeted a picture of the paper’s front page – which is known as breaching embargo. The reason it is revered as so important is because of its ability to affect the international stock markets. The last near-leak came in 1996 when reporter Anthony Harwood of the Daily Mirror handed back the budget documents to Parliament in order to avoid a breach. The staffer who tweeted the Evening Standard’s front page has now been suspended and it is even being questioned as to whether Osborne should resign seeing as the Labour Chancellor Hugh Dalton was forced to in 1947.

All sounds a bit petty to me?
That’s nothing. The entire budget was filled with school boy tactics that were chastised (or aggravated, take  your pick) by the speaker Lindsay Hoyle. He told one of the rowdy MPs that his “voice would be better saved for cheering on Chester FC” to which the MP replied “they’re rubbish too”. Glad to see everybody’s taking it nice and seriously.

So the budget, what should we expect?
In short:

  • The UK’s national debt will rise to 85% of the GDP and won’t start to reduce until 2017-2018.
  • The petrol tax rise planned for autumn 2013 has been scrapped.
  • 1p has been cut from the price of beer.
  • A 1% public sector pay cap will be extended by a year to 2015/16.
  • The government plans to borrow £114bn this year.
  • A 1% reduction on departmental spending limits.
  • Tax free child care vouchers will be awarded to some families.
  • An equity loan to the value of up to 20% of a new-built home will be offered to anyone looking to get on the housing ladder.
  • No income tax on the first £10,000 you make.
  • Spending on infrastructure to be raised by £3bn from 2015/2016.

So what does all this mean for the public?
There are winners and losers in this budget, who The Telegraph characterise into certain groups.

Winners
First-time home buyers; Basic-rate tax payers; Higher-rate tax payers; Beer drinkers; Child savers; Parents who use full-time child care services; Motorists; Investors in small companies; Those who reach state pension age in 2016; and Equitable Life victims.

Losers
Public sector workers; Smokers; Wine drinkers; Annuity buyers; Members of final salary pension schemes; and Low-paid workers who want to join a pension.

If nothing else, we’re just glad education remained fairly ‘protected’.
You can view the pdf for the budget here and view 13 graphs with key information about the budget here

Ellie Clifford, A2 politics Student.

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