The Budget

When you sweep away the theatre and the rhetoric, not much changed in the budget. The critical point appears to be that the reduction in borrowing from forecasts because of higher revenue has been retained and not given away, so borrowing requirements overall are reduced and that should please the markets. Darling has certainly not lost the election today for Labour, neither has he won it either. Cameron gave a good Parliamentary attack performance, but nobody is any the wiser what the Tories would do if they win. The opinion poll stalemate is unlikely to be changed by what we know of either of the main parties’ intentions, if they have to really get down to business after the election. Indeed we know little or nothing of the specifics.

We do know that nobody offers a true reform of income tax and its relationship to vat, a means of controlling house prices, a reduction in housing costs as a percentage of income, a shift from the financial sector to science and industry as a proprtion of economic activity, an increase in saving and a reduction in personal borrowing, a moving of the green economy to centre stage or the re-casting of the economy to a more socially just model. Nor is there a frank acceptance that at 52% of the whole, the state sector of the economy is far too large.  There are bits and pieces around from all the parties which  do things here and there to help, but these are small beer with no coherent plan.

There is still the danger that we come out of recession with the same economic model that took us in, with just a few refinements at the margin. Such a bodge will have only one outcome. Long term decline.