Comment: PBR ignores the bad and the ugly
Alistair Darling delivered a pre-Budget report very much in his own style
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Wednesday, 09, Dec 2009 05:50
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People watching Alistair Darling deliver today's pre-Budget report could have been forgiven for mistakenly believing the recession was over and that everything was alright.
For the first half of his 50-minute statement to MPs it contained almost exclusively good news.
When Darling said his decisions were being made "from a position of strength", the opposition benches could not contain themselves.
In Gordon Brown's ten years at the Treasury he mastered the art of using the Budget to create dividing lines with the Conservatives and learned to always finish on a flourish that left successive leaders of the opposition flustered.
But this was not Darling's style today, leaving George Osborne with very little to attack in his response.
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How could he come back at £2.5 billion of extra funding for troops on the front-line in Afghanistan; free school meals for the children of 500,000 of the country's poorest families; a 2.5 per cent rise in the basic state pension; a two point cut in bingo duty to 20 per cent; a delay in the rise in corporation tax for 850,000 smaller businesses; an extension of the support for mortgage interest scheme; a super-tax on bankers bonuses; and reductions on new, energy efficient boilers for 125,000 homes?
There was some bad news salted throughout the PBR, including a rise in national insurance contributions that the Tories say will see everyone earning more than £20,000 worse off.
The really ugly news was reserved for the chancellor's forecasts on growth, public borrowing and the national deficit, however.
He accepted that the economy would contract by 4.75 per cent this year, but return to growth in 2010, while net debt would hit 78 per cent of GBP by 2014-15.
The deficit will meanwhile shrink just £2 billion to £176 billion in 2010, ahead of being halved by 2014-15, the chancellor insisted.
This makes Darling's claim that public spending will actually rise 2.2 per cent in real terms in 2010-11 all the more extraordinary.
This week Brown unveiled plans to make £12 billion in public spending savings over the next four years, which, combined with Darling's statement, is designed at making Labour seem like reluctant cutters.
In comparison, at his conference speech Osborne 'got real', and won plaudits for doing so, although his High School Musical-inspired "we're in this together" line was derided.
The austerity for posterity angle pushed by the Tories may win marks for honesty, but it has not won over many voters.
"The chancellor is prepared to tell us what he will spend money on but remains totally silent on where the real axe will fall," Osborne was reduced to saying today.
"He is trying to achieve the unprecedented act of ring-fencing a black hole."
Vince Cable for the Liberal Democrats had it more accurately when he said today's PBR was "good for bingo and boilers".
Cutting bingo duty by two points is not going to do much to save the economy, but it might win some votes. Both Osborne and Cable were correct when they described the PBR as a "pre-election report" instead.
It's up to voters to decide whether they prefer the rose-tinted view of the chancellor - in surprisingly upbeat mood - or the doom and gloom of the Tories.