Don’t follow one non-budget with another non-budget
This will be the year of two UK budgets – and the year of none. The chancellor’s pre-election budget will avoid tough action for fear of losing votes and the post-election budget will avoid it because the manifestos shied away from tough threats.
Alistair Darling’s pre-budget election will hint at the austerity to come but provide no detail of spending cuts or tax rises. To be honest about the extent of the problem would be to accept that this government made mistakes and to be frank about the solutions necessary would lose the election.
Who makes the second budget speech depends on who wins the poll. Darling - or a Labour successor - might postpone it until the autumn; George Osborne, if he becomes chancellor, will make it before the summer. But while the Tories can try to say that after looking at the national accounts they suddenly see the scale of the economic problem, both parties will be caught by their own manifestos.
They cannot make soft promises in May to win the country’s vote and then squeeze the people hard weeks later. So there is a serious prospect of one non-budget being followed by another.
Yet there are tough decisions to make, not least admitting to the size of the problem to be solved. There is debate to be had on whether to increase VAT or National Insurance; whether to cut public spending this year or next; whether to slash capital spending or employment costs.
Instead we are likely to have bold talk of the need for cuts but an increasing number of promises not to inflict them on anything that matters, such as health, education, frontline defence, etc. And we will not only have fudges on which taxes must be increased but also hints that some will be cut. There will be talk of aspirations for what can be achieved by the end of the next parliament without discussion of the pain that must be inflicted at its start.
The danger is that instead of the parties competing to be tough, they compete to be soft.
The politicians will try to appeal to people who they presume are not prepared to vote for pain. Perhaps the populace should take the lead and raise the debate to its proper level, showing that they will not be bribed with promises they know will be false. If instead of complaining at the prospect of spending cuts and tax rises, workers and businesses spell out what they are prepared to accept, we may see some serious solutions from the politicians.
