Evanomics

Was it a con?

• Evan Davis | Small Change |
• 22 Mar 07, 11:43 AM

The political debate on the Budget has quickly settled on one issue: did the chancellor try to sell his Budget as a tax cut when in reality it is not?

Yesterday, I said that he had not hidden anything: the fact that it was neutral was mentioned in the Budget speech, and the big tax rise was also there for all to hear.

But if didn't hide anything, he didn't quite highlight things either.

A casual listener yesterday could have been forgiven for thinking that it was a tax-cutting Budget in the way the chancellor delivered it. That impression might have been reinforced by his claims this morning that it is a tax-cutting Budget. The sheer importance of the abolition of the 10p tax rise - which is more or less a straight swap for the lower basic rate - might have been given more prominence in a speech that was not designed to disguise the true effect of the Budget measures.

Overall, in 2009/10, when most of the measures take effect, the Budget takes £125 million away from us. That's not a tax-cutting Budget.

The personal tax package - NI, income tax and credits - is a giveaway. But it's more of a giveaway because of the tax credit rises, than because of the income tax changes.

We'll get chapter and verse on all of this from the IFS later today, when they give us their post-Budget analysis at lunchtime.

But the chancellor can at least reject the idea that the Budget tax rises were hidden away in the small print. He did mention them in his speech.

Of course, the charge that Mr Brown is trying to con us is resonant because the Treasury has been less than open and objective in its presentation of the Budget in other respects.

Just three petty examples that sound small but which appear deliberate:

1. Listening to the speech, you would be left with the impression that child benefit was rising significantly. It was mentioned twice. The chancellor said: "I have focused support on families by raising child benefits and child tax credits..." In fact, no extra cash is scored to child benefit at all, as the real increase in the benefit only bites in April 2010. Despite the fact the chancellor said it grows in "successive stages".

2. The Treasury documents furnished us with examples of families which gain from the changes. But they could not - even when pushed - furnish us with an example of any family at all who loses. Even though their own analysis shows there are some. This could not be said to be unspun clarity of exposition in describing the effects of what was being proposed.

3. In his speech itself, the chancellor chose to mention the cash borrowing figures from 2006/7 to 2011/12. For that 2006/7 year, he could tell us that he was borrowing less than he thought back in November. But when it came to the more important measure of borrowing, the current balance, he missed out 2006/07, and gave us the data from 2007/8. Is it a coincidence that on that measure of borrowing, the 2006/7 data has turned out worse than it he'd told us back in November?

Looking back on it today, I know I made some arithmetic mistakes in the rush to produce post-Budget analysis. But it would be much easier for those of us covering Budgets if we didn't have to spend so much uncovering them first.

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