What Osborne said, and what he meant

Can we take the Chancellor's words at face value? John Rentoul reads between the lines to translate the real message of yesterday's Budget

Osbourne delivering his Budget speech yesterday (BBC)

Extract from Osborne's speech: "This Budget reaffirms our unwavering commitment to deal with Britain's record debts. But because we've already taken difficult decisions, this can also be a reforming Budget that seeks to repair the disastrous model of economic growth that created those debts."

Rentoul's interpretation: Lovely example of the old saying that you can disregard everything before the "but". The voters are tired of austerity already – they agree with debt reduction but they don't like it, so they are receptive to a bit of smoke and mirrors that tells them that tax cuts are possible.

Osborne: "We earn our way in the world if we stop being afraid to identify Britain's strengths and reinforce them, backing industries, like aerospace, energy and pharmaceuticals, creative media and science. A deliberate strategy to create a more balanced national economy, where financial services are strong, but they are not the only string to our bow."

Rentoul: Wasn't it great when Britain was the workshop of the world and made things and had an empire and stuff? Shame that "picking winners" was given a bad name in the 1970s, but if I reel off a list industries that sound really cutting edge, it sounds as if I am doing something.

Osborne: "Over the five-year period, this is a fiscally neutral Budget. This is achieved through a modest reduction in both taxation and spending."

Rentoul: I can ease off a bit for the next couple of years before tightening up towards the end of never – I mean, in five years – without scaring the markets.

Osborne: "In my first Budget, I set the Government the fiscal mandate of achieving a cyclically-adjusted current balance by the end of the five-year horizon. The OBR confirm today that we are on course to achieve that mandate, and have eliminated the structural current deficit by 2016-17.They also confirm that we are also on course to reach our target for debt to be falling as a percentage of national income by the end of the Parliament in 2015-16."

Rentoul: I wonder when people will notice that my five-year "horizon" is a moving target? They thought I said I would balance the budget by the end of the Parliament, the fools! Pay attention to the small print, small people! Here I define the end of the Parliament as 2015-16, when the election will be one month into that financial year.

Osborne: "For years, transport investment in the north of England was neglected."

Rentoul: The Conservative Party really cares about those marginal seats in Greater Manchester and South and West Yorkshire.

Osborne: "Next week the Communities Secretary and the Planning Minister will publish the results of our overhaul of planning regulation. We're replacing 1,000 pages of guidance with just 50 pages. We're introducing a presumption in favour of sustainable development; While protecting our most precious environments."

Rentoul: This is the most extravagant claim made in a Budget speech since taper relief for hunter-gathering was announced in 2500BC.

Osborne: "We should also simplify the age-related allowances – which the Office of Tax Simplification have recently highlighted as a particularly complicated feature of the tax system. The NAO points out that many pensioners don't understand them."

Rentoul: So old people won't know what's hit them when we blame the previous government for the rise in their tax bills.

Osborne: "In the information age people should know what taxes they're paying and what their money is being spent on ... HMRC contacts roughly half of taxpayers each year. From 2014, these 20 million taxpayers will at the same time receive a new Personal Tax Statement. This will tell people how much income tax and national insurance they have paid; their average tax rates; and how this contributes to public spending."

Rentoul: What we need in the information age is more glossy leaflets inserted into junk mail from HM Revenue and Customs.

Osborne: "A 50p tax rate, with all the damage it does to Britain's competitiveness, can only be justified if it raises significant sums of money ... It raises at most a fraction of what we were told – and may raise nothing at all."

Rentoul: Indeed, the 50p rate is so damaging that I am going to keep it for another year. That makes sense doesn't it?

Osborne: "Let us be resolved.
No people will strive as the British will strive.
No country will adapt as the British will adapt.
No country will value those who work as we will value them.
Together, the British people will share in the effort and share the rewards.
This country borrowed its way into trouble.
Now we're going to earn our way out.
I commend this Budget to the House."

Rentoul: Work harder and you will be valued. Once you have been valued, your taxes can be calculated and levied. It is a bit tough but share and share alike, apart from people with incomes over £150,000 a year. Anyway, it was all Gordon's fault. Thank you and good lunch time; I'm off to flog the government's stocks of cigarettes.

John Rentoul is chief political commentator for 'The Independent on Sunday' @JohnRentoul