Wednesday 28 September 2016

Newsmaker: George Osborne

Published 14/03/2016 | 02:30

'Last year, Osborne was seen as a key figure in the Tory election win after reaching out explicitly in his previous budget from his own political base to address the concerns of poorer workers, but this may yet be his last budget' Photo: PA
'Last year, Osborne was seen as a key figure in the Tory election win after reaching out explicitly in his previous budget from his own political base to address the concerns of poorer workers, but this may yet be his last budget' Photo: PA

Britain's chancellor, or finance minister, George Osborne will deliver his eighth budget on Wednesday, a reflection of rare longevity at (close) to the political peak.

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From an Irish perspective, Osborne has been a tough neighbour, having consistently lowered business taxes, including for new and riskier ventures, since he took office.

In many cases Britain's tax and investment regime is now significantly more business friendly than our own, except perhaps for larger multinational investors.

Last year, Osborne was seen as a key figure in the Tory election win after reaching out explicitly in his previous budget from his own political base to address the concerns of poorer workers, but this may yet be his last budget.

Spending plans this week will be overshadowed by deeper questions about the UK's place in or out of Europe.

Osborne has backed Cameron and is campaigning for a vote to stay within the European Union in the June 23 referendum, but their Conservative, or Tory, party is being rent asunder at all levels right up to the cabinet table.

Boris Johnson, Osborne's arch rival, tipped to be the next Conservative leader, and senior cabinet minister Michael Gove, are effectively heading up the campaign to quit the EU.

With the campaign splitting Tories, if Cameron's Brexit gamble fails, he and Osborne are likely to fall too.

That has transformed this week's budget from a post-election context, when reforms and spending curbs might have been expected, to a campaign rallying point in all but name.

Unsurprisingly, the planned centrepiece of this year's fiscal strategy - reform of the pensions system - has already been ditched.

Now is not the time to alienate older voters.

Other strong medicine that might have raised the ire of voters has no doubt also been jettisoned, at least for now.

Osborne can't sit still either.

This week's budget might not include a set-piece reform package, but there may well be tax sweeteners for middle England - the swing consistency Cameron and Osborne need to win to see off the Brexit challenge.

England isn't just the biggest constituent of the United Kingdom, it is both the most Eurosceptic, but also the most supportive, till now of Cameron's leadership.

Osborne's ultimate goal is a balanced budget by the end of the parliamentary term, so the fiscal space is limited.

The political challenge is to send voters away with a warm glow without breaking the bank, or adding to the economic complacency that appears to be making constitutional rebels out of some of Europe's most conservative voters.

Whether and how Osborne pulls it off may well determine the future of Britain, and Ireland, for decades to come.

It will also decide his own prospects at getting the top job in Number 10 Downing Street - depending on how, and when, David Cameron stands down.

Irish Independent

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