Today's Update From The Waugh Zone Is Titled `SAVINGS CRAVING'

* Paul Waugh

by Paul Waugh | Economy

In case you missed it, it’s Budget week. The small-scale nature of the pre-briefed items so far suggests either some kind of rabbit is being held back or it really will be a risk-minimising, cuts-led announcement aimed at shoring up George Osborne’s support within his party.

The PM’s giving him a helping hand today with another micro measure (in fiscal terms), to boost savings of the low paid (though Labour suggest it sounds a bit like the Savings Gateway the Coalition scrapped in 2010). There’s Whitehall chatter that while he’s retreated on pensions tax relief, some kind of savings/pensions narrative has been rescued. My colleague Owen Bennett reported on Friday night that plans for a new ‘lifetime ISA’ plan were very much alive.

Yet the big picture is the black hole in the finances that the FT pointed to this weekend, and Osborne’s confirmation on Marr that he will seek ‘further savings’, “equivalent to 50p in every £100”. Of course, that overall statistic is pretty misleading if you’re the target for the cuts in specific departments The IFS’s Paul Johnson has pointed out that it really means upto 3% cuts in unprotected spending areas. Will the cuts amount to £4bn or more? Osborne struggled to defend disability cuts.

The FT has a rather strong hostage-to-fortune header that he’s ‘expected’ to jack up fuel duty. We have a story that Osborne’s previous fuel duty movescost the Treasury £30 billion yet made little difference to the pump price in practice. Speaking of motorists, the insurance industry has been warning that Osborne could stage another ‘stealth tax’ raid on our motor and homes insurance by jacking up Insurance Premiums Tax (IPT), after the last hike was buried in the tax credits row. Business worries about the apprentice levy going up again. Both could raise serious sums.

The FT suggests another source of income, with plans to target multinationals’ tax relief on debt interest. Ah, remember all those ‘Google tax’ headlines…?

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* Paul Waugh is the Executive Editor, Politics, HuffPost UK.