Andrew Sparrow 

IFS says coalition tax and benefit changes have hit poorest the most: Politics Live blog

Andrew Sparrow’s rolling coverage of all the day’s political developments as they happen, including George Osborne and Ed Balls’ post-budget interviews, and the IFS post-budget briefing
  
  

George Osborne being interviewed on Sky this morning
George Osborne being interviewed on Sky this morning Photograph: Sky News

Afternoon summary

  • The Institute for Fiscal Studies has said that “the poorest have seen the biggest proportionate losses” from the tax and benefit changes introduced by the coalition. (See 2.12pm.) In its post-budget briefing, it also revealed that the richest gained the most from the personal savings allowance introduced in the budget. (See 3.18pm.)
  • Ed Miliband has said that the IFS has confirmed that Tory cuts in the next parliament would be twice as deep as the ones in this parliament. (See 2.52pm.)
  • David Cameron has said that the reaction of Labour and the Lib Dems to the budget shows they want to borrow, spend and tax more. Arriving in Brussels for an EU summit, he said:

When I first came here as prime minister five years ago, Britain and Greece were virtually in the same boat. We had similar-sized budget deficits,” he said.

The reason we are in a different position is we took long-term difficult decisions and we had all of the hard work and effort of the British people. I am determined we do not go backwards.

Listening to other parties’ reactions to yesterday’s excellent budget shows they want to borrow, spend and tax more. I say let us build on the success that we’ve had and not go back to square one.

  • Nigel Farage has urged Ukip to “turn the other cheek” to the insults they will receive during the election. Speaking in Rochester, Kent, where he welcomed former Medway Tory councillors Tom Mason and Vaughan Hewett to Ukip to stand in May’s local elections, he said:

It’s going to be a very dirty, nasty general election campaign. It’s already getting very personal. Every day we see these volleys being thrown at David Cameron from one side and then the other side throw it back at Ed Miliband. And everyone seems to throw it at me on a daily basis. Our job is to turn the other cheek, to rise above it and to say what we are for.

That’s all from me for today.

Thanks for the comments.

Here are four of the most interesting graphs from the rest of the IFS post-budget briefing.

This one shows how George Osborne is only able to say that debt is falling as a percentage of national income in 2015-16 because he has brought forward assets sales.

This one shows the distributional impact of the new personal savings allowance. It’s a tax cut for the wealthy.

This one shows how median income has recovered in the three years after the last four recessions. The latest recovery has been the weakest.

And this one shows the distributional impact of all tax and benefit changes. The yellow line takes into account all measures since January 2010 (ie, it includes Labour’s last budget, which penalised the wealthy) and the blue line just takes into account coalition changes (which have penalised the poorest the most in proportional terms.)

Updated

Miliband says IFS confirms Tory cuts would be twice as deep as any this parliament

Ed Miliband has put out a statement welcoming what the IFS has said about the budget. Here it is in full.

It’s now 24 hours since the Chancellor boasted that his was a budget to make Britain walk tall. Now we know the truth. We now know this is a budget which will bring public services to their knees. Cuts in the coming years twice as deep as any we have seen. These cuts would be devastating for our National Health Service. In the words of the Office of Budget Responsibility, the government watchdog, which the chancellor could not bear to read out: “A much sharper squeeze on real spending... than anything seen over the past five years.” Confirmed today by the independent Institute of Fiscal Studies.

This scale of cuts cannot be made without cutting our NHS. The truth is that this will take public spending back to the level of the 1930s. And on living standards, the chancellor tried to tell people they have never had it so good. In fact, he was a chancellor who has never had it so wrong. In the last hour the Institute of Fiscal Studies has confirmed what people all over the country already knew – that pay has fallen under this government.

Public services and the damage this government will do are on the ballot paper at this election. A Vote for the Conservative party is a vote to put our public services on their knees. And drive down living standards for another five years.

Miliband’s comment about Tory cuts being twice as deep as any this parliament refers to this line in Paul Johnson’s statement.

The cuts of more than 5% implied in each of 2016-17 and 2017-18 are twice the size of any year’s cuts over this parliament.

Paul Johnson's IFS post-budget briefing - Summary

And here are the key points from the opening statement by Paul Johnson, the Institute for Fiscal Studies director, at the IFS’s post-budget briefing.

  • Johnson said, if you consider tax and benefit changes introduced by the coalition, “the poorest have seen the biggest proportionate losses”. But if you look at all the changes introduced since the financial crash (ie, including the 50p top rate of tax and other Labour measures), “the richest have been hit hardest”.
  • He said middle earners had been the most protected.

As far as tax and benefit changes are concerned, benefit cuts have hit low income working age people. Tax increases have hit those on the highest incomes much the hardest. People on middle and upper middle incomes have been remarkably insulated on average from tax and benefit changes.

  • He said household incomes would probably be higher in 2015 than in 2010.

Average household incomes have just about regained their pre-recession levels. They are finally rising and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak. But that still represents by far the slowest recovery in incomes in modern history.

Ed Miliband claimed people were £1,600 worse off and Osborne claimed people were £900 better off because Miliband was talking about gross earnings, while Osborne was talking about net incomes, he said. He said incomes were a better measures, and Miliband’s figures only went up to April 2014. But he also said Osborne’s claims involved an element of forecasting.

Mr Osborne is relying on forecasts of income through to the end of 2015. All of the real increase since 2010 is in the forecast. It occurs in the last year, in 2015. There is no actual increase in the data we have so far.

  • Johnson said inequality had fallen “a little” over this parliament if you assume everyone faces the same rate of inflation. But if you adjust for differential inflation (ie, the way inflation affects some groups more than others), inequality in 2014-15 is “very similar” to its level in 2007-08, he said.
  • He said Osborne ought to tell the voters how he was planning to achieve his £12bn welfare cuts.

It is now almost two years since he announced his intention of cutting welfare spending by £12bn. Since then the main announcement has been the plan not to cut anything from the main pensioner benefits. We have been told about no more than £2bn of the planned cuts to working age benefits. And remember apparently the “plan” is to have those £12bn of cuts in place by 2017-18. It is time we knew more about what they might actually involve ...

The chancellor argues that because he is committed to £12bn of welfare cuts and £5bn of anti tax avoidance measures the required cuts to public service spending are much more modest. But if he really wants us to believe that then he needs to be more explicit about how he actually thinks he can cut welfare spending and raise substantial additional sums from clamping down on tax avoidance.

  • Johnson said the plans for Help to Buy ISAs and the extra money for mental health services in the budget were unfunded.
  • He said Whitehall departments would have to plan for “dramatically differing” spending scenarios after the election.
  • He said, as a reformer, Osborne would be remembered most for his changes to pensions.

With further changes to the taxation of annuities it is in changing the structure of the taxation of savings and pensions that he has been most radical over the past five years. This is possibly the one area of lasting structural change in the tax system for which he will be remembered.

  • Johnson said Labour could meet its fiscal targets with no further cuts after 2015-16.

Our latest estimates suggest that Labour would be able to meet its fiscal targets with no cuts at all after 2015-16.

  • He cast doubt on whether a Conservative majority government would actually implement the cuts set out in yesterday’s budget.

The budget suggests spending cuts of £40 billion by 2018-19, but “just” £26 billion by 2019-20. Even with a majority Conservative government is that pattern really the most likely outcome?

  • IFS says Labour could meet its targets without any further cuts.
  • IFS says even a majority Conservative government would probably not implement the spending cuts envisaged in the budget.

Institute for Fiscal Studies' post-budget briefing

The Institute for Fiscal Studies’ post-budget briefing has just started.

Here are the key points we’ve had so far.

  • IFS says George Osborne will be more remembered for his pension reforms.
  • IFS says people are much worse off now than they expected to be at this point in 2007.
  • IFS says people on middle and upper middle incomes have been protected the most.
  • IFS says the poor have been the biggest proportionate losers under the coalition.

Updated

Lunchtime summary

  • Danny Alexander, the Lib Dem chief secretary to the Treasury, has used a statement in the Commons to set out Lib Dem spending plans for the next parliament that differ from those of the Conservatives. The Treasury’s decision to allow him to make such a partisan statement infuriated Labour MPs, and seemed to annoy John Bercow, the Commons Speaker, too. Alexander told MPs that Conservative plans would take government consumption to the level it was in 1994.

The era of ‘Cathy Come Home’ is not my vision for the future of Britain ...

So the fiscal plans I am publishing today are based on a further £6bn pounds from tax dodgers, and an additional £6bn of tax rises. Those in high-value properties, the banking sector, and others should pay more, rather than asking those working on low incomes to accept less.

This would leave around £12bn of departmental savings and the remaining £3.5bn from welfare savings. Those measures allow the structural deficit to be eliminated in 2017-18. In fact, Mr Speaker, the coalition’s fiscal mandate is met with headroom of £7.7bn ...

We will grow public expenditure as the economy grows after 2017-18. Ten years on from the financial crisis is the right time for the public finances to turn the corner. Continuing the pain beyond that date is unnecessary – it is simply cuts for cuts’ sake. To go too slowly, as the opposition recommend, would drag out the pain for too long.

The national debt as a share of the economy would fall in every year of this plan, from 78.2% in 17-18 to 76.1% and then 73.9%.

The implied spending envelope for departments would be £314.3bn in 2017-18, rising to £324bn and then £348.1bn in the last year.

That is £25bn, then £36bn and then £40bn more money available for public services and infrastructure investment than in the plans presented yesterday.

Just think what you could achieve with that.

Chris Leslie, the shadow chief secretary to the Treasury, dismisssed the statement as “a farce”. He told MPs:

I thought statements in the House of Commons were supposed to be from ministers speaking collectively on behalf of the Government. [Alexander] has totally abused that privilege, assembling MPs this morning on a false pretence - I know it’s usual to have several days of budget response, but not several budgets.

  • The Institute for Fiscal Studies has criticised George Osborne for refusing to give details of his proposed £12bn welfare cuts. Paul Johnson, the IFS director, told the BBC

He’s been saying that for the last two years and has given us almost no details about what that actually looks like. I think it’s rather disappointing that so far in, we still haven’t heard any details about this.

Asked about this on the Today programme, Osborne said that people could trust him to deliver these cuts because he had a track record that showed he could cut welfare.

  • Nick Clegg has said said that Britain and the rest of the world should recognise the Palestinian state if Binyamin Netanyahu, the Israeli prime minister, continued to rule out the two-state solution. (See 10.23am.)

Tim Montgomerie in the Times (paywall) is very good today. He describes vividly how Lynton Crosby operates.

At a recent Downing Street meeting there was a lively discussion about fine-tuning the Tories’ message on the economy. One participant urged more help for the low-paid. Another worried that further action was needed to quell anger about the banks. One wanted a big emphasis on housebuilding. One suggested that the idea of devolving power to local authorities in the north should be put centre stage in the budget to prove the Conservative commitment to rebalance the economy.

Everyone around the table wanted a slightly different tweaking of the Conservative pitch. Lynton Crosby, the party’s election strategist, then lifted his head: “All very fascinating . . .” (my source says he uttered these words in a tone that suggested he might not have been entirely captivated) “ . . . but voters only need to know two things about the economy: it was broken five years ago by the other lot and it’s OK again now under us.”

There was a lot of dutiful nodding around the table from some of the Tories’ biggest brains. One said: “Yes, Lynton, quite right.” Everyone knew that the situation was much more complicated than that, but that it was also as simple as that in terms of raw electoral politics. The thought-provoking discussion was over. The Crosbyisation of the Conservative party — and the belief that all that matters is a few simple messages, repeated endlessly — advanced one more step. And I mean “advanced” in the same way that Crosby meant “fascinating”.

My colleague Michael White has done a write-up of how the budget has been received in the papers. His conclusion?

Rarely can I remember such a disparate range of verdicts as to what Osborne’s sixth budget meant, let alone his achievement – or lack of it – since the first of the six was unveiled shortly after the unexpected formation of the Tory/Lib Dem coalition following the indecisive election in May 2010.

Danny Alexander has just staged a photocall with his yellow box.

The sketchwriters weren’t impressed.

Today's Guardian seat projection - Tories 277, Labour 269

Here is today’s Guardian seat projection.

Today's Guardian seat projection
Today’s Guardian seat projection

Danny Alexander's alternative spending statement - Verdict from the Twitter commentariat

Judging by Twitter, this unprecedented Lib Dem financial statement does not seem to be working out too well.

From the Spectator’s Isabel Hardman

From Sky’s Sophy Ridge

From Miranda Green, a former Lib Dem press officer

From the Times’s Sam Coates

From the Daily Mail’s Jason Grove

From the Press Associations’s Ian Jones

Labour’s Chris Bryant says George Osborne announced an orchestra tax relief yesterday. But something only counts as an orchestra if it includes wind instruments, strings, percussion and brass. That excludes many orchestras.

Alexander says that is a serious point. He will take it up with HMRC.

Adam Afriyie, a Conservative, says the Lib Dems have betrayed their voters. This display is the Westminster bubble at its worst. He says voters will make up their own minds.

Alexander says Afriyie should welcome what the government has achieved.

Alexander is replying to Leslie.

He says no resources were spent on this, beyond the time of civil servants.

On tax evasion, he says these are new powers.

He says it is entirely proper for him to set out the Lib Dem plans.

The Labour display today has been “pathetic”, he says.

Chris Leslie, the shadow chief secretary to the Treasury, is responding.

He says this is a farce. It is a party political statement, not government business.

We are getting not just one budget, but two, he says.

He asks the Speaker how Labour can object to this. And how much is this party political broadcast costing?

On the tax evasion measures, he says he wants to know whether these really are new measures, or whether they are just press releases.

How do we know these measures won’t be as ineffective as the tax deal with Switzerland, that has raised less than a third of the £3bn expected?

Will Alexander now admit that Lord Green’s appointment was a mistake?

Alexander is desperately trying to distance himself from the Conservatives. Is Alexander saying he cannot back the budget? We thought the Quad signed up to it. Can Alexander vote for this?

Doesn’t he realised how two-faced they look? They want to be in government, and out of government.

It is too late, says Leslie. The Lib Dems have been propping up the Tories. They have backed them all the way.

Updated

Alexander is now listing the three new measures being introduced to toughen the law on tax evasion. (See 8.47am.)

Fines will be in proportion to the amount of tax being evaded, he says.

And he says that the government will take measures to ensure HM Revenue and Customs can do more to publicise the names of tax evaders.

He ends by announcing that £200,000 will be available to go towards the Speaker’s parliamentary placement scheme, a work experience schemed designed to help people from disadvantaged backgrounds get experience of politics.

Labour MPs try to shout down Danny Alexander

The heckling is coming from the Labour benches.

That’s a reference to the Labour MP Andrew Gwynne, a shadow health minister.

Danny Alexander, the shadow chief secretary to the Treasury, is speaking now.

He says there is an alternative to the spending plans set out by the Conservatives.

Going back to the era of Cathy Come Home does not appeal to him.

He is publishing an economic plan today, based on Lib Dem assumptions.

(Alexander is getting a considerable amount of heckling.)

He says the Lib Dems would ask some groups, like banks, to pay more.

They would allow the deficit to be eliminated.

The Lib Dems would expect spending to start going up from 2017-18, he says.

Bercow expresses reservations about Alexander being able to make Lib Dem statement

John Bercow, the Commons Speaker, says ministerial statements are supposed to be ministerial. They are not meant to be used for party purposes.

He hopes Danny Alexander will bear this in mind, he says.

(From that, it sounds as if Bercow was not very keen on Alexander delivering this statement at all.)

  • Bercow expresses reservations about Alexander being able to make Lib Dem financial statement.

Danny Alexander's Commons statement on Lib Dem spending plans

In his speech at the Lib Dem spring conference at the weekend Danny Alexander looked ahead to the day when he would be delivering “a Liberal Democrat budget”. He even produced a yellow budget box to illustrate his point.

It seemed like a moment of delusional wishful thinking. But, in an unprecedented move, Alexander will be making a Lib Dem finance statement in the Commons in just a few minutes. It is not a full budget, but he will set out Lib Dem spending plans, which are different from Conservative ones, and they will be explained in an official Treasury document. Statements of this kind are normally for government business, not party business, but the Lib Dems insisted on being allowed to deliver this one. Alexander argued that it would be unfair for George Osborne to be allowed to present a Conservative budget in the Commons so close to the election if he did not get the chance to put his alternative too.

Nick Clegg's Call Clegg phone-in - Summary

Here are the key points from Nick Clegg’s Call Clegg phone-in.

I actually share President Obama’s views much more than David Cameron’s. I think it is extremely worrying. It cannot be more alarming to have seen Binyamin Netanyahu, in the latter stages of the election campaign in Israel, do something that no leading Israeli politician has ever done, which is to rule out the prospect of a two-state solution. The whole push for peace, for decades now, has been premised on the point that at some point the Israeli nation and a Palestinian state can be created to live in peaceful co-existence with each other. It is an astonishing thing that he should have departed from that long, long tradition. I think it is quite right that the White House has expressed serious misgivings about that.

And I have to say to you, if Binyamin Netanyahu now unilaterally has decided to rule out the prospect of a Palestinian state, then I think it is inevitable that the British parliament, as it voted to a few months ago, should rule a Palestinian state in. In other words, that we should in response - and it would be in response to extreme provocation from Netanyahu - act to recognise a Palestinian state. It cannot be right, given that this is the crucible of so much violence and division across so many communities, that one man, in what I assume was a desperate attempt to curry some votes, should basically tear up the basic tramlines on which a peace deal is likely to occur ...

I very much hope, fervently hope, that [this turns out to] be breathless rhetoric that he is now going to row back from. If he carries out his threat to rule out a two-state solution, and expand illegal settlements, then I think the world, including the British parliament, would have no option, inevitably, but to recognise the Palestinian state.

  • He said he welcomed the latest plans from broadcasters for one seven-party debate, a Question Time session involving Cameron, Clegg and Ed Miliband, a “challenger” parties debate and Jeremy Paxman interviews with Cameron and Miliband. This was not ideal but better than nothing, he said. “I just want something to happen.”
  • He said that Conservative spending plans for the next parliament would “nobble” the working-age poor.

The Conservatives are departing quite radically [from the coalition’s approach to spending], lurching away from the approach which we’ve taken over the last half a decade. Over the last five years, we have basically taken a mixture of tax increases and spending reductions, welfare reductions, action on tax avoidance, to start balancing the books. That’s allowed us to halve the deficit as a proportion of our nation’s wealth.

The Conservatives announced last autumn that they are going to lurch away from that and only nobble the working-age poor and only the working-age poor will make additional sacrifices to balance the books. I don’t think that’s fair, I don’t think it’s right to ask for £1,500 off the 8m poorest families in this country, which is what the Conservatives want to do.

  • He said that he had given up smoking and was now vaping.

Updated

Q: At your party conference there was a stall with people betting on how many seats you would get. Someone sarcastically said 150, as Clegg promised in 2008. And the party tried to cover it up.

Clegg says he does not know anything about that.

Nick Ferrari then concedes that the Lib Dems are not the kind of party that could organise a cover up like that.

And that’s Call Clegg over.

Q: What is happening with the TV debates?

Clegg says he thinks David Cameron and Ed Cameron get one-to-one interviews with Jeremy Paxman, followed by a seven-party debate ..

Q: Shouldn’t you get a session with Paxman.

Clegg says this is not ideal.

Q: Won’t the seven-way be a farce?

Clegg says what he has to say will be very interesting.

There are then challenger debates, he says, and then there is a three-way Question Time.

Q: You must be mad about being left out?

Clegg says this sounds better than nothing.

Q: Is it true that you are spending £500,000 on teaching people to speak Cornish?

Clegg says he does not remember the details, but he says it is important to keep the Cornish language alive.

Clegg says he has given up normal smoking. He is now vaping, he says.

Clegg says Britain should recognise the Palestinian state following Netanyahu's re-election

Q: Do you welcome Binyamin Netanyahu’s election is Israel? David Cameron said he did at an event last night?

Clegg says he does not welcome that. Like President Obama, he says he finds it “extremely worrying”. Netanyahu ruled out a two-state solution in a desperate bid to shore up votes.

Is Netanyahu is going to do that, then countries like Britain, in return, should recognise the Palestinian state, he says.

Clegg says he hopes that this was just “breathless rhetoric” from Netanyahu from which he will row back.

But, if that is Netanyahu is serious, then the world should recognise the Palestinian state.

  • Clegg says Britain and other countries should recognise the Palestinian state if Netanyahu does not withdraw his comments about the two-state solution.

Updated

Q: Why do you accept claims that unemployment has fallen when most of these jobs are on zero hours contracts?

Clegg says that is not true. There around 600,000 zero hours contracts. And there are around 30m people working in Britain.

The government is also acting to stop the abuse of zero hours contract.

Most new jobs are not part-time jobs, he adds.

Updated

We know what George Osborne makes of the Sun’s front page in London. (See 8.47am.) But I wonder what he makes of this.

Clegg says, in all Ed Balls’s “interminable” interviews this morning, he has not explained how he would balance the books.

He says the Lib Dems want to stick to the measured, balanced plan that the coalition has adopted.

Of course he would not accept a coalition agreement with Labour that would involve returning to their previous irresponsibility. And he would not accept a coalition with the Tories that involved all the cuts falling on the working poor.

Q: There was nothing in the budget for me?

What about the personal allowance, Clegg asks.

The caller concedes he will benefit from that.

Clegg says that has been worth £900. That is not trivial, he says.

Clegg goes on. What about fuel duty? What about when you go for a pint?

Q: I can’t afford a point.

What about council tax? We have given money to councils to let them freeze council tax.

Clegg says the OBR is making a statistical assumption about the future that is not going to happen.

They ignore potential future measures on issues like tax avoidance.

He says Conservative plans to cut spending further are “crackers”.

Nick Clegg's Call Clegg phone-in

Nick Clegg is hosting his Call Clegg phone-in now.

Q: Are you publishing a Lib Dem budget today?

Nick Clegg says yesterday there was a coalition budget.

But the two coalition parties do not agree on what should happen to spending in the next parliament.

George Osborne is “lurching” away from what has happened so far.

Until now, the coalition has sought to cut the deficit from a mixture of tax rises and spending cuts.

Now the Tories just want to achieve this through cuts. That would penalise the working poor.

Their extra cuts would be worth twice as much as we spend on the police, he says.

He says the Tory plans would take the level of spending on public services to the level it was half a century ago.

Tory plans would involved “whalloping and whacking” the working poor.

Ed Balls' morning interviews - Summary

Ed Balls, the shadow chancellor, has also been giving interviews this morning. Here are the key points he’s been making.

  • Balls said the OBR figures showed that the cuts planned by George Osbrone would be “more severe” over the next three years than they have been over the last five.
  • He repeated his claim that Osborne would have to cut the NHS or raise VAT to achieve his own spending targets.

I don’t think those cuts are going to be possible for George Osborne. He’s going to end up either cutting our National Health Service or raising VAT.

  • He said Labour would not reverse the increases in the personal tax allowance, the new £1,000 tax-free savings allowance and the Help to Buy ISA announced in the budget. But he said the Help to Buy ISA would not address the real problem with housing.

You only solve that by building more affordable housing and getting the house prices more affordable. [Osborne] did nothing on that.

  • He said Labour offered a “ more balanced” and “fairer” approach to deficit reduction.

We say why don’t you put the top rate of income tax back up to 50p for people earning over £150,000? That will be a fairer way to do it.

Sensible spending cuts, some tax rises at the top, more action on wages and tackling the abuse of zero-hours contracts. A more balanced plan which will get the deficit down but not do so at the expense of our National Health Service.

Updated

Osborne announces new criminal offences to tackle tax evasion

Here are the key points from George Osborne’s interviews.

  • Osborne said that the government would be announcing new criminal offences to tackle tax evasion. Danny Alexander, the chief secretary to the Treasury, is due to announce them in his Commons statement later, but Osborne jumped the gun on BBC Breafast. He said there would be three aspects to the crackdown.

We’ll be announcing, first of all, a new strict liability criminal offence. What that basically means is you won’t have any excuses any more if you’ve got an offshore bank account. If you’re evading tax, you’re breaking the law, and this will be a new power for the courts and for the prosecutors to go after you.

Second, we’re going to look at a new criminal offence that you can’t help someone evade tax. This is for the accountants and the other companies that might help someone evade tax – that’s a brand new criminal offence.

And third, we’re going to say if you’re helping someone evade tax, you’re going to face very hefty fines as well. So it’s a whole new set of criminal powers, new fines to make sure we continue the fight against tax evasion and avoidance. I had a whole set of measures yesterday in my budget.

  • He refused to comment on a suggestion that Lord Green, the former HSCBC chief executive and chairman who became a Conservative trade minister, could have been caught under these laws because of the role HSBC played in facilitating tax dodging in Switzerland. He could not comment on individual cases, he said.
  • He said that, if it had not been for the Lib Dems, the Conservatives would have pushed to do more in the budget to take more people out of the 40% tax band.
  • He refused to give further details of how the Conservatives would cut welfare spending by £12bn. But voters knew he had a track record on cutting welfare spending, he said.
  • He refused to commit the Conservatives to keeping defence spending at 2% of GDP, although he said he was committed to keeping Britain safe.
  • He praised the “geniuses” at the Sun for their front page, which depicts Osborne as the “epic” character Dave in the advert for Money Supermarket.

I almost spilt my coffee this morning when I read the front page of The Sun. What’s great is that they have always got a way of bringing life to the budget and it’s the geniuses of The Sun who can come up with that front page.

Osborne admits productivity is weak. It has been for many decades.

He is not someone who says there is no role for government; far from it. Government can help build a northern powerhouse. But it needs to sort out the debt.

Q: And we will know the detail of your plans before we vote?

Osborne says people know the Conservatives’ record already.

And that’s it. It wasn’t hugely revelatory, but I will post a summary of the key points from this interview, and from the others this morning, shortly.

Q: In 2003 you talked about financial products helping people avoid tax.

Osborne says he was pointing out that, under Labour, there were loopholes. In government he has addressed this. Rich business people used to boast about paying less tax than their cleaners; he stopped that. People used to evade stamp duty; he has stopped that.

Q: What would you have done without the Lib Dems?

Osborne says he wants to go further lifting the tax allowance to £12,5000.

(That’s a bit rich. That’s a Lib Dem policy too.)

He also says he wants to take more people out of the higher, 40% tax band. The Lib Dems don’t support that, he says.

Q: Would your new tax avoidance laws lead to Lord Green being prosecuted?

Osborne says he cannot comment on individual cases. But today he is proposing new criminal powers to tackle tax evasion.

Q: Anyone listening would conclude that people like Green, who ran a bank that helped people engaged in tax evasion, would be caught.

Osborne says he won’t comment on individual. But, under his plans, if a bank helps people evade tax, it will face charges.

Q: The prime minister says defence spending should rise. How can you square that with the cuts you are planning?

Osborne says he is not proposing deeper cuts. He is proposing cuts at the same pace as over the last five years.

Osborne says he believes strongly in defence. Army staff are training solidies in Ukraine. He says he has committed to real increases in spending on equipment.

Q: So you will meet the 2% target?

Osborne says no one should doubt the desire of himself and Cameron to keep Britain defended.

Q: So you are not promising 2%?

Osborne says he is promising to keep Britain safe.

Q: But people have a right to know where the £12bn will come from?

Osborne says the government has saved £21bn from welfare in this parliament. People can judge him on his record.

Debt as a share of national income is now falling. That is a massive moment, he says.

Q: You haven’t done what you said you would do. You are only half-way there. David Cameron said not meeting this goal would be a moral failure. So you are a moral failure.

Osborne says he had a windfall from bank share sales. He has used that to pay off debt. No short-term giveaway can do more for families than his long-term plan.

The alternatives are borrowing and giveaways. They make interviews like this easier, but they are bad for the country.

George Osborne's Today inteview

James Naughtie is interviewing George Osborne. Osborne is in Tilbury, Essex.

Q: Your plans involved what the OBR calls a “rollercoaster” of public spending. Will you tell us where the axe will fall?

Osborne says the Tories would not make all the cuts in departmental spending, as the OBR assumes. It would save money from welfare, and tackle tax evasion.

Q: Where will the £12bn welfare cuts come from?

Osborne says the welfare system must make it pay to work. And there must be a control on costs. The Tories have set out some examples, like freezing working-age benefits.

Q: If you are going to protect pensioners, where will that money come from? From working-age people? Do you have a plan you are not telling us? Or don’t you have a plan?

Osborne says pensioners deserve protection.

But he also decided to increase the pension age. That will save £500bn. It means the pension can continue to be generous.

With the rest of the welfare budget, he is proposing to freeze working-age benefits. If his opponents oppose that, they would have to raise taxes or increase benefits.

It is part of an approach that is getting Britain back to work.

Here are today’s YouGov polling figures.

Yesterday we had the budget. But often it takes 24 hours for the best analysis to emerge, and that will be the focus of the day.

George Osborne, the chancellor, Ed Balls, his Labour shadow, and Danny Alexander, the Lib Dem chief secretary to the Treasury, have all been giving interviews already. I will round them up shortly.

But, first, I will focus on the set-piece - Osborne’s interview in the 8.10 slot on the Today programme.

Here’s the agenda for the day.

8.10am: George Osborne is interviewed on the Today programme.

9am: Nick Clegg hosts his Call Clegg phone-in.

10.30am: Danny Alexander, the chief secretary to the Treasury, gives a statement in the Commons on Lib Dem spending plans.

1pm: The Institute for Fiscal Studies holds its post-budget briefing.

As usual, I will be also covering all the breaking political news from Westminster, as well as bringing you the most interesting political comment and analysis from the web and from Twitter. I will post a summary at lunchtime and another in the afternoon.

If you want to follow me on Twitter, I’m on @AndrewSparrow.

Updated

 

Leave a Comment

Required fields are marked *

*

CAPTCHA

*