Chancellor George Osborne delivered his eighth budget speech in the House of Commons this lunchtime and amidst the shouting and bellowing he managed to deliver a number of well timed comic moments, all at the expense of his political enemies.
Whilst it was short on tax changes it was a moment for Chancellor Osborne to trumpet his achievements, and to emphasis that in this uncertain and volatile world we were best minded to follow his plans to deliver the economic and social stability for Britain’s future generation.
He said that in order to achieve long term solutions we needed to have sound public finances (i.e. a balanced budget) and a vibrant and enterprising business sector (i.e. reductions in taxes and other unnecessary Government costs).
So he set the scene by stating that the Office of Budget Responsibility (OBR) has forecast that UK growth will rise from 2.2% in 2015, to 2.0% in 2016, then 2.2% in 2017 and 2.1% for three years thereafter. He said that the expected growth rate for 2016 would be the best for any major economy in the world, but such growth was predicated on UK staying in EU. Should the June referendum go the other way, then all bets were off.
He said that under his chancellorship more than 2 million jobs, many of them highly skilled and well paid, had been created, and that UK now has the lowest proportion of people claiming out of work benefits since 1974.
Whilst at the same time as delivering growth and jobs he has managed to keep inflation in check at only 0.7% this year and 1.2% forecast for the next. (Very different to 1974 when it was 16%)
The reason, Mr Osborne advised us, that things are so rosy is because the Government has purposefully cut public spending, so much so that by the end of this Parliament Government spending will only be 36% of GDP, compared to 48% in 2010. Mr Osborne was pleased to say that the reforms in Government spending and the continuing devolution of power to the regions will also deliver greater accountability at a local level.
In that regard he announced the creation of more elected mayors, including the creation of a West of England Mayoral Authority. He was keen to state that from the end of this Parliament 100% of local spending will originate from locally accountable authorities.
The Chancellor announced the go-ahead for Cross Rail 2 in London, better rail and road links across Northern England, and improvements in flood defences especially in the North West, before turning his attention to education reforms and the creation of a Sugar Levy to tackle child obesity.
It was only towards the end of the speech that we got to hear about the business and taxes. And even here he announced good news all around!
Such as the continuing freeze on motor fuel duty for the sixth year in a row, and also duty freezes on beer, cider and whisky.
He said that he was maintaining the reform of pensions and stimulating the savings culture by increasing the annual ISA limit to £20,000, and through the creation of a Lifetime ISA. This is a flexible method of saving for either the purchase of a first home or for retirement with a maximum savings amount of £4,000 per annum alongside a further £1,000 contribution from HM Government.
Moving onto taxes he said that the Capital Gains Tax rate will be cut to 20% from 28% for higher rate tax payers, 10% from 18% for basic rate taxpayers, and the creation of a standardised 10% rate of CGT for the sale of unlisted company shares. These changes alone will start to have significant effects upon the way that new enterprises are funded and for those working in them how they will be rewarded.
He even found room to announce reduction in business rates by increasing the Small Business Rate Relief from April 2017, restructuring the stamp duty rates on commercial properties, and perhaps most significantly, reducing the Corporation Tax rate to just 17% from April 2017.
For the self-employed the Chancellor re-announced the abolishment of Class 2 NIC payments (This was originally announced in 2015).
He was pleased to say that as from 6 April 2016 the income tax personal allowance will be increased to £11,000 and £11,500 12 months later. The current allowance is £10,600.
And finally, he will be increasing the threshold on total earnings at which 40% income tax becomes payable to £45,000 as from April 2017, up £2,615 from £42,385 which it will be as from next month.
So where were the jokes? As always it was a case of “you should have been there at the time”. However there was one very funny joke concerning the abolishment of the Liberal Democrats rather than the lump sum pensions provision, and a rather tamer one involving the constituency of Jeremy Corbin. Maybe my laughter threshold has been lowered!
But what did come across from Mr Osborne was a man who is unapologetic in his approach, determined and prepared to seize the moment to create a legacy. He seems far more comfortable of the prospect of his continual promotion in the Tory ranks than Boris Johnson does right now.