This is a Budget full of untruths, half-truths and misleading statements.   It is not true, as Osborne repeatedly said, that it was unavoidable – the better option of deficit-cutting economic growth was discarded.   It is not true that the balance between spending cuts and tax increases had to be 80-20 (or more precisely 77-23%) – it could easily and better have been 60-40 or even 50-50 provided the tax increases were focused on the very rich.

Nor is it true that this is a ‘fair Budget’ as Osborne keeps strenuously asserting since the VAT increase to 20% is a regressive tax which will really hurt poor households, while the new impositions on the rich – the very modest increase in CGT to only 28% (not 40%) and the bank levy raising £2bn – are just peanuts for the super-rich.   Whereas hundreds of thousands of public sector workers, the victims of the financial crash, will lose both their jobs and their incomes, the bankers and the hyper-rich who were the architects of the financial crash will lose neither their jobs nor their incomes nor their wealth.   Is this what Cameron/Osborne mean by our being all in it together?

Nor is it true that this Budget was inevitable because the markets demanded it, otherwise our prized triple A credit rating would be threatened.   All the evidence before the election suggested that Alistair Darling’s fiscal stance (which was undoubtedly tough) was quite sufficient to keep the febrile markets satisfied.   Sterling and gilts actually strengthened during the election campaign even though the likelihood of a hung parliament was growing.   The facts suggest strongly that Osborne’s continually banging the drum about the bond market risks was motivated by the need to have an excuse to go for broke in spending cuts to shrink the State rather than by any serious threats from the City.

Nor again can Osborne seriously assert that we have an over-bloated public sector which, when drastically cut back, will pave the way for a great private sector renaissance.   The eye-popping assumption that an over-dominant State is somehow squeezing out entrepreneurial drive in the North-East and that once the chains are off the spirit of private enterprise will burst out, takes some beating.   The truth is rather that the depressed regions are still an economic wasteland which the private sector will eschew like the plague until massive public investment lays the foundation for a profitable private renewal.

This is not an honest Budget.    It was born of an ideological fixation to reduce the State below 40% of GDP, the facts and arguments were massaged to fit round this preconceived idea, and the methods used – draconian cuts to produce balanced budgets – remain a throwback to the reactionary and ultimately disastrous economics of the 1930s.   Watch this space.

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