Osborne’s budget is “smoke and mirrors” and “kindergarten economics”

| 16/03/2016 | 2 Comments

Screen Shot 2016-03-16 at 15.25.10Ian McDougall FCCA is the Managing Director of McDougall Johnstone and finance spokesperson for Business for Scotland.

Commenting on today’s budget (16 March) he said:

“Mr Osborne spent the first 10 minutes of his speech blaming every other economy in the world except the UK for another tax raising and deficit reducing target that he has missed. When elected in 2010 he promised that the UK would be running a surplus by this time. He has missed this by an eye watering £72.2billion and continues to mislead the public by suggesting we will be back in surplus by 2019/2020.

“On the surface the Chancellor’s support for Aberdeen and the Oil and Gas sector is positive – we welcome any support in challenging times.

“However, on cutting through the smoke and mirrors it’s clear to see an opportunity missed: scrapping the supplementary charge completely and pledging tax incentives for the exploration of new fields would have more impact.

“The productivity gap between the UK and the rest of the G7 is now the widest it has ever been.

“For the last five years the Chancellor has been ignoring the warnings from the IMF and eminent economists that cutting budgets before increasing productivity and wages would be damaging to the UK recovery and again today we have seen these warnings ignored.

“The Chancellor’s response to this black hole in his finances is to once again cut spending and offer cheap handouts, like a risable 1% reduction in Corporation tax in 2020 – something which was hailed as a ‘race to the bottom’ when the SNP put cutting Corporation Tax into the White Paper – and a £1000 allowance for so-called new age digital businesses.

“This has simply proven one thing; this Chancellor has absolutely no idea what is required to generate growth for business in the UK.  Business needs capital investment in transport infrastructure, communications and an increased focus on, and funding, for Research and Development that will lead to innovation in products and services, increased productivity and the resultant increase in wages and living standards.

“It is clear that the Chancellor’s ideological austerity project has failed, it has failed the UK economy, it has failed UK business and ultimately it has failed the people of the UK who have now suffered almost 10 years of cuts, reduced wages and a reduction in living standards.

“His continued reliance on austerity represents a kindergarten level of understanding of economics.”

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About the Author ()

Rhona is Business for Scotland's Membership Engagement Executive and Events Manager. | Twitter @RhonaMiddler

Comments (2)

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  1. Muir says:

    Great article!

  2. Norrie Hunter says:

    He has no qualifications in economics but has visions of being the next prime minister. This budget was a marker for a job in number 10. Meanwhile most of us on low incomes and struggling to make ends meet have got nothing from this budget.

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