The most dismal or the most boring budget ever?
I commend to this house a budget that puts the next generation first, well does it?
Robert Chote, the OBR’s [Office for Budget Responsibility] director said the weaker than expected outlook had blown a £56bn hole in the public finances over the next five years – more than twice the £27bn improvement Osborne was handed in the 2015 autumn statement, which helped pay for his costly U-turn on tax credits.
Total tax revenues are currently 36.3% of GDP. That's already a higher tax burden than at any point during 13 years of Labour government. And according to the OBR, they're projected to rise to 37.5% of GDP by 2019-20 - which is higher than that figure has been since at least 1964, which is as far back as our numbers go.
Growth is expected to be lower every year until 2020, at a little over 2% per year, the estimate for economic growth in 2017 has been cut to 2.2% from 2.5%, and to 2.1% from 2.4% in 2018. Growth in both 2019 and 2020 is now estimated at 2.1% compared with the previous forecast of 2.3%. So if another financial shock strikes, Britain could easily be pulled back towards recession.
The chancellor has already missed his targets for capping welfare spending and debt reduction, and the OBR said he would have broken his deficit reduction rule had he not deferred tax increases for companies, increased pension contributions for Whitehall departments, brought forward infrastructure spending and intensified the squeeze on disability benefit payments.
The white rabbit was Osborne’s announcement of a tax on sugary drinks, designed to combat childhood obesity. When introduced in 2018, the tax will raise £500m by levying a charge of up to 8p on a standard 330ml can, but it only covered the detail during the day, by the time the figures had been dissected, the happiness was looking a little bleak.
I think it is far too optimistic to expect by 2019/2020 the magical fiscal target will be reached by speculative spending and a continued spiral downwards on growth as there is no room for error over the next 3/4 years.