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.
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