This is a budget of reheated Thatcherism, making Britain still more unequal

The Chancellor has unveiled a huge tax cut for high earners, while saying nothing about the real-terms cuts he’s inflicting on tax credits and the minimum wage. The increase in the Personal Allowance that one half of the coalition has staked its political reputation will spread £3.3 billion between both rich and poor in 2013.

But by then tax credit payments will be £2.5 billion lower than under Labour’s plans. With the announcement that the Minimum Wage will rise by far less than inflation it seems clear that low earners will lose more than they gain, as the wealthiest have their income tax slashed.  But the Budget also contains serious challenges for Labour politicians aspiring to win the general election in 2015.

Osborne signaled that after the next election he would extend the annual cuts to departmental spending budgets for another two years and also slash welfare by a further £10 billion. How Labour develops their alternative plan for close the deficit under these fiscal circumstances will be a key determinant for the next General Election.

Andrew Harrop is the General Secretary of the Fabian Society, and writes in a personal capacity