BUDGET 2014 OVERVIEW Today’s Budget offered the Chancellor his last significant opportunity to set out his stall on why the electorate should trust him with the economy beyond the next election. The combination of an upgrade in growth forecasts, a further Income Tax cut for 25 million people, and a boost for British business by reducing energy costs should provide a compelling case for George Osborne’s approach. The Coalition will be pleased that the public is finally starting to believe the worst is behind them as recent polls show that almost half the population now believe a recovery is on the way. If this trend continues then Labour’s core ‘cost of living crisis’ narrative will have less of an impact.
the end of this financial year, there is a lot of pain to come. In further cause for concern, the underperformance of key BRIC economies has raised questions as to whether the ‘export-led recovery’ will materialise any time soon. This leaves all the political parties with a fascinating dilemma ahead of the General Election in 2015: on one hand they know they need to be realistic about their future spending plans to have credibility; but they also need to inspire confidence in a brighter future. In short, they need to decide how honest they can afford to be with the public and still attract votes.
Budgets are as much about what has not been said. The reality is that, despite optimistic forecasts, the recovery is very fragile. With only 40% of planned spending cuts in place by
POLITICAL REACTION Rt Hon Ed Miliband MP
Leader of the Opposition, Labour Party
“Classic Tory con. Give with one hand, and take far more away with the other.” Norman Smith
Chief Political Correspondent, BBC News
“Booze, Bingo, Business and Savers. That’s your Budget 2014 Folks.”
Stephen Lotinga
Managing Director, Public Affairs
THE HEADLINES PREDICTED GROWTH
2.7%
2.3%
this year
in 2015
UNEMPLOYMENT Down by
Frances O’Grady
Secretary General, TUC
“Corporate tax cuts haven’t worked... What we need instead is the Government to encourage investment in skills. The Chancellor needs to make sure that the recovery is a fair one and people feel the benefit.” John Longworth
2.6%
in 2016
63,000
DEFICIT
6.6%
in 2013/14
5.5%
in 2014/15
4.2%
in 2015/16
Director General, British Chambers of Commerce
“Business wanted a Budget that was disciplined, focused, and geared toward the creation of wealth and jobs – and that’s what the Chancellor has delivered.”
BORROWING
INCOME TAX THRESHOLD
£108 bn
Rises again to
this year
Jonathan Eley
£10,500
Personal Finance Editor, Financial Times
“Savers have been calling for help ever since the Bank of England cut its main interest rate to 0.5 per cent – today they got it in spades.”
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