Reading today’s newspapers, it seems that the biggest decision of Osborne’s mini-Budget has already been made. Evaporating growth means lower tax revenues, so the choice is between protecting his deficit reduction plan or keeping total spending cuts at less than 1 per cent a year.
Increasing savings to, say, 1.3 per cent a year would mean he could easily meet his deficit targets. But it seems the decision has been taken to borrow even more. In his March budget, Osborne laid
out plans to increase government debt by 51 per cent over the course of a parliament – lower than the 60 per cent that Labour had planned.
It now looks as if Osborne will increase debt by even more than that 51 per cent. Tax revenues are disappointing (corporation tax is down 7 per cent last month, against the 14 per cent annualised
rise the Treasury was
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