Budget 2016: Osborne's Sugar Levy will get the headlines, but he's presiding over a weak economy and a fractured society

Osborne's budget will grab headlines, but there is more moving beneath the surface. Photograph: Pound coins from Pixabay (License) (Cropped)

If there is anything you can take away from the UK government's 2016 budget statement, it's that the Chancellor George Osborne knows how to tick boxes. There was support for small businesses, a levy on sugary products and government help for savers (BBC, 2016).

The Chancellor gave these policies, gathered together, a budget for the next generation. Yet as ever, the headlines are only what Tim Farron called the 'political theatre' (ITV, 2016). There is much more to be found in the details - not least a revealing look at the Chancellor's approach to government.

Osborne admitted that economic growth forecasts suggest the economy is growing more weakly, and that the government has missed its own debt and deficit targets (BBC, 2016). Yet room was still found for cuts to corporation, raising the highest tax band and making cuts to capital gains tax.

Jeremy Corbyn's response was hostile. From the off he called the Chancellor's budget a legacy of failure, that was poor on equality (BBC, 2016{2}). The Labour leader argued that the breaks for the wealthy were being paid for by those who could least afford it.

Corbyn said that tax breaks for the wealthy were disgusting when they were accompanied by cuts to disability support. The poor attitude towards equality was epitomised in the continued existence of the tax on 'women's products', as in essentials like tampons and sanitary towels, and the patronising plan of distributing the proceeds to 'women's' charities.

As for the next generation, there was little in the budget to offer a tremendous amount of hope. Under-25s won't benefit from minimum wage rises - or increasingly from any kind of social security at all (BBC, 2013) - and savings help for under-40s won't do much to help deal with rising housing rents, let alone house prices.

There was also little information on how the Chancellor intended to find the funds to cut the deficit. Beyond the previously announced changes on tax credits and ESA, there were no other major spending cuts were outlined, beyond a vague commitment to finding around £4bn in government 'efficiencies' - and apparently raising an, astonishing, £12bn from closing tax loopholes.

From a progressive perspective, one thing that the budget did reveal was Osborne's attitude to government. The Conservatives have felt comfortable pitching themselves as supporters of limited government, the private sector and even pitching themselves as rendering the Liberal Democrats obsolete.

But the Chancellor's decisions reveal something different, highlighted in the way that he framed tax cuts for small business. In his statement, Osborne said they were made possible by higher revenue coming in from big business.

But what Osborne could not resist was to also take higher receipts as a signal to cut taxes. What this highlights, and the Chancellor himself alluded to, is the Conservative view of taxation as an incentive or disincentive. A mechanism to be used to manipulate social behaviour toward the governing party's interpretation of the 'national interest'.

What hasn't been asked by those handing out successive tax cuts is whether tax in itself has a role to play as a civic contribution, that goes towards the serving of the public good. Whether there is a contribution that ought to be made, back into the community, for the extraction of wealth in your own interest.

As Osborne cuts back government spending and the public sector he reveals something else. A vision of a small state, one that does little itself but interferes a lot: meddling and social engineering through the tax system, trying to shape society through supply and denial of small but crucial funds to devolved institutions largely bereft of funding.

The sum so far of Osborne's approach is an increasingly divided and unequal society. Taxes have come down but the economy remains weak. Burdens continue to pour onto the more vulnerable. Osborne will get the headlines, but they are only a mask that disguises a weak economy and a fractured society.

References

'Sugar tax surprise in Budget - but growth forecasts cut'; on the BBC; 16 March 2016.

'Farron calls on Osborne to abandon surplus target'; on ITV News; 16 March 2016.

'Budget 2016: Jeremy Corbyn attacks Osborne's 'failure''; on the BBC; 16 March 2016{2}.

'David Cameron suggests cutting benefits for under-25s'; on the BBC; 2 October 2013.