Evening Standard comment: The Chancellor’s Budget for the young

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The Chancellor’s Budget speech had a context and an agenda: the EU referendum and the Chancellor’s own leadership ambitions. If the Budget read more like a Queen’s speech, that is in keeping with George Osborne’s hopes to succeed David Cameron.

Most importantly, from next April the tax-free allowance will go up to £11,500, which benefits not just the lowest paid but all taxpayers. Similarly Mr Osborne raised the higher tax threshold to £45,000, which takes many middle ranking workers out of tax altogether.

His tone was deliberately sober, with an eye to small business and employers at the expense of big corporations. There are cuts in corporation tax — to 17 per cent by 2020 — and an extension of stamp duty relief to business. He has removed business rates from many small companies. His boast is of a nation of shopkeepers. Naturally he downplayed the Office for Budget Responsibility’s downgrade of the growth forecasts; optimistically, he assumes a turnaround by 2020.

The devolution of power was a big element of his pitch; so not only are there tax concessions on the oil industry for Scotland but in London the Greater London Authority will be retaining the proceeds of the business rate three years earlier than planned.

The most populist, and popular, aspects of the Budget are the measures specifically to deal with tax-avoiding developers responsible for some of London’s most expensive luxury properties, who make billions on apartments bought by international investors but whose headquarters are registered in lower-tax jurisdictions such as the Channel Islands or the Isle of Man. This will not only please Londoners, who resent the proliferation of properties intended for wealthy overseas buyers, but also those companies that do pay UK tax.

There are two big elements to the spending promises in the Budget, to offset £3.5 billion cuts by 2020. One is infrastructure. The Chancellor’s trademark in office has been his support for big transport projects.

To London’s great benefit one of them is Crossrail 2, which this Budget confirms.

Focus on education

If the Chancellor mentioned that “we put the next generation first” he mentioned it half a dozen times. The surprise element of the Budget is its focus on schools, in particular, the funding for extended school hours. The Chancellor has let it be known that he is worried that the poorest pupils get the poorest education. The declaration that all schools will become academies is intended to help deal with that. The Chancellor justifies his intervention in education on the basis of its effect on productivity — the justification for his insistence that pupils will study maths until the age of 18. But for the working young, the young person’s ISA may go some way towards making saving worthwhile.

Indeed, the Chancellor’s concern for the next generation goes beyond schools. He is not only taxing sugary fizzy drinks to make children healthier, he is using the proceeds to increase spending on sport in schools.

Political agenda

Mr Osborne is a famously political Chancellor and this is a political Budget. His refusal to raise fuel duty is a naked bid for the support of rural and business drivers. His declaration at the outset that economic performance would be endangered by uncertainty following Brexit is a swipe at his political opponents, including the Mayor. As a package, this Budget makes the most of his limited spending options and is a bid for him to be seen as a socially inclusive Chancellor, bent on helping children, working class savers, small businesses and would-be homeowners. Let’s see how that plays with voters.

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