---

Budget Resolutions and Economic Situation

This has been an interesting debate, although we have not heard too much about transport, despite that being the theme for today. I suppose that that is a feature of Budget debates, but I suspect that it is also a down to the fact that the Budget did not contain that much about transport. I am therefore not going to delay the House too much by talking about transport but will talk about the broader measures and about the Chancellor in the broader context. People say that the Chancellor is a man who already worries a lot about his legacy, despite it being very early in his Chancellorship. I suspect that explains the volume of leaks, which reported that he wanted this to be remembered very much as a watershed Budget. The word used in the press quite a bit was ““Lawsonian””, which I understand is a compliment where he comes from. Well, it was a watershed Budget and it will be remembered—there is no doubt about that—but perhaps not for the reasons he wanted and not in the manner he anticipated. It was a watershed Budget for two key reasons. First, it shattered, once and for all, the illusion that this Chancellor is a master of political tactics or economic strategy. The only masters are the masters of the universe, down the road in the City, who will be thanking him for this Budget. They might be the people who think he is still smart about economic theory. I hate to tell him, but the only vanity that is burning right now is his own, on the front pages of the Daily Mail, The Daily Telegraph and all the other newspapers in which I read this morning that one Tory Back Bencher, who remained nameless—I cannot think why he wanted to remain anonymous—said:"““Everybody was saying George is a great economic strategist and political strategist and how unique he is to have both skills: that is going to be questioned. In fact, colleagues already are.””" More important, this Budget was a watershed because it gave the lie, once and for all—[Laughter.] The laughter indicates that Government Members are not worried about this in any way, shape or form. However, the Budget gave the lie to the notion that we are all in it together in this country in a period of austerity, because after this Budget we clearly are not. Clearly after this Budget, the old Tory order is restored and some people in our society are, in their view, more equal than others. The themes the Chancellor sought to pursue in his speech were that his Budget would be simple, predictable and fair—that was how he described it just a couple of days ago. This morning, the Institute for Fiscal Studies described it as a ““hotch-potch”” of reforms that"““may turn out to be less fiscally neutral than intended””." It is hard to disagree with that conclusion from the independent IFS, because everywhere one looks in the Budget one finds measures that are mis-described, such as the tax increase on pensioners that is described as a simplification, and outcomes that are overstated. We have heard a lot today about this being a Budget for business, but according to the OBR, it is resulting in a 0.7% reduction in business investment this year, which is down 7% on the anticipated volume of business investment over the past year. Crucially, numbers have been massaged throughout the Budget or just plain made up—guessed at—on the basis of Arthur Laffer's famous cocktail napkin curve. I am afraid that the hon. Member for West Suffolk (Matthew Hancock) will find that numbers in the Budget will fall apart.