It would be easy to forget that there’s a Budget just around the corner, next week in fact. Without a doubt, this will be Osborne’s toughest one yet. Not only does he face a backdrop of a weaker economy and shrinking tax revenues, his own personal star is falling and he’s on the political back-foot thanks to Boris Johnson’s growing personal popularity within the Party. He’s got little wriggle room to raise revenues having seemingly abandoned pensions reform and now coming under pressure from his backbenchers not to raise fuel duty.
Plus, the EU referendum throws everything out of whack. After delivering a surprise Commons majority – not a comfortable one, but a majority nonetheless – next week’s Budget should be one which re-sets the course of the economy over the lifetime of the next Parliament. It should be a Budget of tough decisions or radical reform, that sets Osborne up to make concessions and sweeteners in subsequent years. But thanks to the referendum campaign, he can’t risk that. He will have to play it safe, and consolidate.
So don’t expect fireworks next week. The Chancellor has very little room for giveaways, and very little appetite to rock the boat….