Most of the work is done by rising tax receipts
We'd give George's Emergency Budget 7½ out of 10.
Naturally we liked the £1000 increase in the personal tax allowance, the promised 4% cut in Corporation Tax rate, the tax cut for small businesses, and the cuts in payroll taxes.
We also liked the faster progress back to fiscal balance, the squeeze on ballooning welfare, the two year public sector pay freeze, and the promised cuts in departmental spending limits.
However, we didn't like the increase in VAT, and we didn't like his various other smaller tax increases.
We also remain concerned by the lack of detail on what exactly gets cut in terms of departmental spending.
All he told us today was that he's intending to cut something like £65bn pa by 2015-16, around 15% in real terms. However, given that the NHS and international development are ringfenced against any cuts, and that education and defence will be protected against the worst cuts, every other department is facing a 25% cut.
Cuts on that scale have never ever been achieved by in peacetime. Clarke achieved 6% in the mid-90s, and even that was hugely assisited by peace dividend cuts in defence. Callaghan managed just 4% following the 1976 sterling crisis, but that only with the IMF supporting him. Even the famous Geddes Axe following WW1 only delivered its 25% cuts in central government spending because local authorities increased theirs.
George says the autumn spending review will fill in the detail. We'll take him at his word.
Let's hope we don't have to downgrade his score when we see the results.