George Osborne’s aim in the budget was to demonstrate that the government’s plan is working and to show that he has not given up on rebalancing the economy.
Did he succeed? The Office for Budget Responsibility’s numbers are unremarkable – growth of 2.7% this year and 2.3% next – but they help. So does the downward revision of borrowing to £108 billion this year and £95 billion next (2014-15). Borrowing is still a long way above the 2010 projections but the gap is narrowing.
As for individual measures, the chancellor did just about enough to claim this was a budget for exports, investment and, with a £7 billion package, large energy users. Industry should be pleased with all this.
The most eye-catching individual announcement was the doubling of the annual investment allowance to £500,000, extended until the end of 2015. This went further than expected.
The “rabbit” in the budget was the increase in the ISA allowance to £15,000 and the removal of the restriction on cash ISAs. This and far-reaching pension reforms – the budget’s most significant announcement – will stay in the memory. They count, unusually, as a responsible giveaway, distinct from the usual pre-election fare.
This piece is cross-posted from EconomicsUK.com with permission.