It usually takes more than a day or two for the pundits to discover the feet of clay underlying a budget. But this week’s Osbornian effort seems to be falling apart rather more quickly.
As the OBR and the IFS have pointed out, there is a huge black hole in the form of £12 billion worth of welfare cuts. Mr Osborne can’t or won’t explain which bits of welfare spending are to be targeted, even though the options appear to be extremely limited:
According to the Department for Work and Pensions’ latest annual accounts, the UK’s total welfare bill this year will come out at around £167.5bn. However, well over half of this of this – £93bn – is pensions and pension credit, and the chancellor has pledged that his additional £12bn of cuts won’t come from pensioners.This leaves Osborne with the task of shaving £12bn off the remaining benefit bill of £74bn, the equivalent of cutting one pound in every six in just a two-year period.
Then there is the crazy Help to Buy ISA whereby the government will subsidise housing demand, pushing house prices upwards and ultimately benefiting no-one. Meanwhile the desperate need to increase housing supply is utterly neglected.
More amusingly, in a development reminiscent of the pasty tax, the Chancellor’s proposed tax break for orchestras has had to be swiftly amended to include brass bands.
How soon before we start using the term omni-shambles?