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Rating the Budget by the Thatcher, Tebbit, Lawson, Merkel and Reagan standards

Tim Montgomerie


I give George Osborne 4/5 for the Thatcher factor. Yesterday's Budget was notable for its There Is No Alternative quality. As the FT's frontpage declares: Osborne sticks with Plan A. Britain is the poster nation for fiscal conservatives around the world. In America Osborne is a hero among Republicans for being such a deficit hawk. No other country is taking such resolute action to cut borrowing and it's good that spending cuts are doing 75% of the work.

I don't give the Chancellor five Thatcher faces because I'm worried at his decision to load the cuts evenly across the parliament. I'd prefer that they'd been frontloaded so that we get more of the medicine out of the way early. I worry about the politics of election year cuts being every bit as large as mid-term cuts.


3/5 for the Tebbit factor. Tebbit was the Tory who understood Essex Man. Osborne's petrol tax cut was his attempt to reach Sun readers and very welcome it was too. Beep, Beep, Beep, Beep, Yeah! says Britain's best-selling daily, this morning. The leaflets distributed by CCHQ yesterday highlight the other practical things that Osborne has done for the backbone of Britain. Low income workers lifted out of the income tax system altogether. Council tax frozen. The basic state pension relinked to earnings.

I only give the Chancellor three Tebbits, however, because I worry he made too much of his sweeteners. His big message yesterday should have been that the next two or three years will be even tougher (as mortgage rates, prices and taxes rise overall) but I'm doing all I can to help you. Instead he made sweeteners the centrepiece when straight-talking should have been in the spotlight.


3/5 on the Lawson standard. Lawson was the great tax reformer. He eliminated taxes. He simplified the tax system. He had the courage to cut high rates of tax on the wealthy and he unleashed the forces of enterprise as a result. On cutting corporation tax by 5p over the course of this parliament and by raising the income tax threshold to £10,000, George Osborne can claim to be a budding Lawsonite. The ambition on merging the operation of NI and income tax is huge but it's years away and the jury must be out on whether it will happen (fascinating table here on what the merged rates look like).

Paul Goodman welcomes what George Osborne said on 50p but, like Iain Martin, I wish Osborne had gone much further in creating a pro-enterprise tax system. I would prefer he had raised taxes on high value property, for example, to cut taxes on job creation. I also wish he'd done more on energy prices rather than wasting money on the Green Investment Bank. Lower energy prices, not unilateral action on climate change should be the priority.


3.5/5 on the Merkel scale. As I write in today's Daily Mail, "If Labour built the economy on a bubble of debt, Osborne wants to rebuild Britain on German rock." He’s a tax cutter but he’s more interested, like Frau Merkel, in paying national debts. He also likes the German model of apprenticeships, technical colleges, regional growth and safe, rather than casino-style, banking.

HAYES JOHN Osborne and the whole Coalition have a long-term plan to get the economic fundamentals right. On planning, so businesses can more easily expand. On welfare, so that taxpayers aren't subsidising people who can work but won't (and so there hard-earned cash helps the really needy). On schools so kids graduate with meaningful qualifications. On apprenticeships so we don't have to import a new generation of skilled labour from abroad. Special credit to John Hayes MP on this front. The Skills and Lifelong Learning Minister has been arguing for apprenticeships to be a flagship Tory policy for five years. He deserves special credit for the Coalition's policy of increasing the number from under 300,000 to over 400,000.

Missing is modernisation of our trade union laws, a serious plan to rid ourselves of EU red tape and an end to Harriet Harman's Equality legislation.


Only 2.5/5 on the Reagan scale of Great Communication. Poor George had a bit of a frog in the throat and it was not an exciting budget to listen to. Just ask Sleepy Ken Clarke!

The Government is making the right big judgments but is still fighting too many tactical battles with Labour and its other critics. The big story should be to underline how serious Britain's economic predicament is. During the Labour years Britain fell from 4th to 12th in international league tables for competitiveness. Although Britain’s best schools are world beaters, most of our children are getting a poorer education than their future competitors are getting in France, Germany and China. Millions of able-bodied Britons are on benefits, failing to fulfil their God-given potential and acting as a drag on every taxpayer and business in the land. If we don’t repay our debts the best and most talented young Britons won’t stay in this country. They’ll flee to nations that didn’t mortgage their futures (as Mark Field has warned).

Osborne still needs to do the fireside chat that warns of the dark tunnel ahead but that he has the steely plan to reach the light on the other side. Things are really going to get worse before they get better and Osborne should have made that clearer yesterday as a way of building confidence in his understanding of the road ahead.

And there's news from Bloomberg this morning that there will be light at the end of the tunnel. Bank privatisations could provide the pre-election bonanza that will transform the opinion polls.


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