Osborne’s creation of the Office for Budget Responsibility means forecasts for growth and borrowing are made independently.
The chancellor ensured this was possible by getting the Treasury to tweak the forecasts for the budget deficit, which were revised higher once the election had been fought and won. The race was tight and the Conservatives wanted to kick-start their election campaign with some tax cuts. The economy was struggling and public borrowing was high. Eventually, interest rates had to be doubled to 15% to curb inflation, leading to the biggest crash in the property market in history.Īll of which made life tricky for Lamont in 1992. They stimulated an already booming economy and, what’s more, they did so in the very first year of the parliament. Lawson was as good as his word, but the big tax cuts in the 1988 budget were a mistake.
The chancellor Nigel Lawson was able to cut the basic rate of income tax from 29% to 27%, with the clear hint that there would be a further cut to 25% if the electorate gave Mrs T a third term. Nor was it four years later when a booming economy meant tax receipts were flooding in to the Treasury. The split in the Labour party that led to to the creation of the SDP meant the 1983 result was never in doubt. As such, Sir Geoffrey (now Lord) Howe’s tax-raising 1981 budget was followed by a much gentler affair two years later. This is the classic way to manage the political cycle, ensuring that any pain administered to voters is long forgotten by election time. Photograph: PAįor Mrs Thatcher’s first two terms in office from 1979-87, there was a rhythm to Conservative budgets: toughness early on in the parliament, tax cuts as polling day approached. Sir Stafford Cripps and the despatch case in 1950. In truth, the squeeze on living standards and higher inflation following the 1967 devaluation were more likely reasons Ted Heath won. But the chancellor Roy Jenkins also copped criticism for not being generous enough in the last of his three budgets. Another explanation was that Labour would have won had Gordon Banks not gone down with a bad dose of food poisoning before England’s World Cup quarter final against Germany. One theory was that Harold Wilson had lost because of a set of rogue trade figures, affected by the arrival of a couple of jumbo jets. A much more modest affair followed in 1964.Īfter Labour’s defeat in the 1970 general election, there was much soul searching. The problem then, though, was that the election planned for the autumn of that year had to be postponed due to the Profumo scandal.
There were Conservative giveaway budgets before both the 19 elections, and Reggie Maudling was also in generous mood in 1963.
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