Getting ready for live blogging the budget
It’s hard to think that Hugh Dalton had to resign as Chancellor because he had mentioned a budget “secret” to a journalist on his way into the House of Commons to actually deliver the speech. Today the debate is about whether the Chancellor has saved up anything surprising for his speech, and there have been clearly well-sourced predictions in the papers since the weekend.
There are going to be budget measures that the TUC will welcome. If the leaks are right, there will be an ambitious programme to assist the young unemployed once they have been on the dole for more than 12 months. There are even rumours of a list in JSA and redundancy payments for which we have been campaigning. And while there are conflicting reports about whether the rich will be hit through an end to higher rate tax relief on pension contributions or a higher tax rate for much bigger earners, some steps to tax fairness are likely to be included.
On the debit side we are likely to see cuts in public spending, unconvincingly presented as efficiency savings. There will doubtless be other sins – perhaps mainly of omission rather than commission – that we will comment on as announced.
But it will be the big picture that is hardest to call. It looks like there will not be a big fiscal stimulus as not just the TUC has backed but also the National Institute (pdf), in a little reported initiative. The government seems to have accepted the arguments of financial orthodoxy and Mervyn King that we cannot afford a bigger deficit. Yet the costs of continuing mass unemployment will be very great, and money spent now protecting and extending the nation’s productive capacity will make it much easier to restore public finances.
We have never agreed with those who have attacked the government for rescuing the banks. A collapse of the financial system would have had appalling knock-on effects everywhere else in the economy – though whether the government got enough in return is of course another issue.
But what is needed now is action as bold to get the real economy moving, and ensure that we emerge from recession in a way that rebalances the economy away from the dominance of finance – and meets the social and environmental challenges that cannot be put off until the economy is fixed.