Osborne's Budget tinkers while bankers cash in

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Austerity and untold riches – Budget day told the story of two Britains. For the majority, there was little consolation in Chancellor George Osborne’s announcements as he ploughed on with a Plan A that most experts seem to think has already failed. For nine senior Barclays Bank employees it was vintage champagne all round as they cashed in bonuses worth £39 million.

Osborne wanted to avoid the disastrous press that followed his 2012 Budget, when the headlines focused on his inept "pasty tax". His budget had a handful of populist measures that seemed like a desperate attempt to shore up the Conservative vote.

In addition to the raised childcare support, Osborne promised help for first-time buyers, made a U-turn on beer duty and maintained a freeze on fuel duty. The personal tax allowance will rise to £10,000 from 2014, a concession to the LibDem coalition partners to keep them onside in the run-up to the next general election.

The measures looked like fiddling with the small print rather than a serious attempt to deal with the problems of sluggish growth, the UK’s downgraded credit rating and the threat of a triple-dip recession. Osborne seemed more concerned about Thursday’s headlines than the long-term future.

The Barclays employees didn’t have to worry too much about Osborne’s book-balancing, although they probably still thought they should have had a tax cut. The employees, including the trader with the most grimly-appropriate name, Rich Ricci, were awarded the bonuses in shares, which several of them immediately converted into the folding stuff. After all, the lesson of Cyprus must be that hard cash is infinitely preferable to bank shares.

The bank chose Budget day in the hope that the news might escape the expected outrage. It underlined how completely out of touch the senior echelons of banks are with the mood of fiscal desperation that is prevailing elsewhere in the country. Ricci cashed in a bonus of £17.5 million. He is unlikely to be too excited. He made £44 million in 2010.

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