91훑괵 NEWS | The Reporters

Chancing it

Evan Davis | Small Change |
12 Mar 08, 03:25 PM

The slogan for the Budget - you mustn't grumble, it's not too bad.

Sure, the next year or two is not what we thought it'd be, but it's not all permanent damage to the economy we're facing.

In other words, while he is not dismissing the current problems as a mere blip, the chancellor is at least arguing that some of it is simply a temporary disturbance to normal service.

So, on the economy, the chancellor concedes that some growth in the next two years will be lost - and it won't come back later (which is in itself a major concession. His predecessor always assumed that any growth lost returned later).

But at least by 2010, the economy will be growing again at its normal rate. And there'll be no recession in the meantime.

The same pattern occurs on government borrowing. After several years of painfully slowly trying to bring it down, the chancellor is now actually predicting and allowing for more borrowing next year. Overall, the finances are 짙5-8bn a year worse than he'd expected last year.

But again, you mustn't grumble. The public finances improve with time, and there's only a modest new overall tax rise to help recoup some of the revenue lost during the slowdown.

Fair enough. But behind this scenario though, people might still find things to grumble about.

By 2010, on Mr Darling's forecasts, the economy is a little smaller than the Treasury had been expecting; prices are a little higher and while public spending will be the same, it won't go so far, in that world of higher prices.

And then above all, what if the next few years are far worse than the chancellor has allowed? With so much going on outside the UK, you really can't rule that out.

That may lead to full scale moaning.

The chancellor though, is chancing it - at least , until the next election.

Comments Post your comment

1.
At 04:25 PM on 12 Mar 2008,
roger owen. wrote:

Although the budget is all about forecasts it is the actualities I find disturbing. Why if we're such a dynamic knowledge based economy is the balance of payments so heavily in deficit to extent of about 짙1 billion a week? And if our per capita GDP is so high why are a lot of out public services so poor and why don't we feel better off?

2.
At 04:48 PM on 12 Mar 2008,
Sebg wrote:

Significant slowdown in growth, substantial increase in borrowing, but we are in a better place than most others.... What rubbish!
The passengers on the 2nd floor of the Titanic were better placed than those on the 3rd floor, but they still drowned!
When will the spin stop?
Almost a decade of over-indulgence in easy credit, promoted by a government only interested in short-term gain is about to bite Joe Public on the backside, and now we must pay 'green taxes' for cars that are a necessity while China and the USA pollute the hell out of the world... significant increases in alcohol duty wrapped up in the guise of 'binge drinking' when better policing and stronger deterants are needed...
Why do this government persist in lying about their motives and hammering the law abiding, tax-paying public?

3.
At 04:56 PM on 12 Mar 2008,
Alan wrote:

Perhaps you would enlighten me about other aspects of public finances. Why are the major liabilities of public sector pensions and PFI payments not mentioned in your analysis? I understand that these run into 100's of *billions* of pounds and must be serviced out of taxation. There may be other 'off book' costs that we never hear about. Quite probably, the total of these costs will dwarf the '짙5-짙8 billion worse' that we have been told about.

4.
At 06:35 PM on 12 Mar 2008,
J. Cadenhead wrote:

Why should beleive anything our politicians say.
We could save a fortune by scrapping all devolved goverments , make scottish irish welsh carry out most of there time in there own areas and help climate change as well by scrapping there flights to westminster

There seems to be more corruption in the political scene now than ever.

5.
At 09:01 PM on 12 Mar 2008,
David wrote:

Am I the only one in this country who has had enough of being taxed beyond belief for no return in this country.

Why have we wasted so much money in the last 10 years. If our government had been sensible and saved some of the good years money we could be having tax cuts at the moment which would increase the feel good factor.

As it is, all we hear is debt, debt, debt.

If there is a credit crunch, who does Britain actually borrow their money from? Is Britain sub-prime now?

6.
At 09:04 PM on 12 Mar 2008,
David wrote:

Am I the only one in this country who has had enough of being taxed beyond belief for no return in this country.

As it is, we have had tax and spend for no real return and now all we hear is debt, debt, debt.

If there is a credit crunch, who does Britain actually borrow their money from? Is Britain sub-prime now?

7.
At 09:29 PM on 12 Mar 2008,
George wrote:

Evan, why do you not publish a graph for broadcasting on TV of the ACTUAL figures (not as a percentage of GDP) of our net national debt increasing per year since 2001 when it was 짙306 billion to the current 짙600 billion? Otherwise most people do not realise that 짙43 billion per year is added to our national debt as someone would increase their mortgage on an interest only basis with no plans to repay the capital.
As a comparison, you can also show the tax receipts per year and the ACTUAL public spending increases per year. This because I believe tax payers would be horified at how much Gordon Brown has been borrowing at future taxpayer liability and the vast increase in interest payments to fund this debt.

8.
At 09:50 PM on 12 Mar 2008,
Donald wrote:

The only Budgetting that I see, is...... a Hooded Robin taking from the poor to give to the rich!

Those on low income pay more tax i.e. 짙12500 / year pay an extra 짙230.

Those retired Civil Servants, MPs etc on pensions greater than 짙34000, get an income increase of approx. 짙1800.

Looks like the poor will have to keep on Labouring

9.
At 09:52 AM on 13 Mar 2008,
Verity wrote:

If tax increases on alcohol and tobacco were designed to improve our health and reduce the blight of binge drinking, they will sadly fail. An increase of 4p per pint of lager will add a whopping 40-80p to the cost of an average night out for Britain's biggest drinkers. I can just see them all juggling their accounts to decide whether they can afford to go out this weekend!If ever there were a tax disguised as social responsibility this is it.

10.
At 02:11 PM on 13 Mar 2008,
Robert Woodfield wrote:

As usual Evan, a tellingly accurate synopsis, at least IMHO. Plenty of time if 'events' turn out as his Tresury officials/ministerial team think/hope for a neutral budget with some more sweeteners next year; followed by the give away (by Ed Balls?) in 2010 followed by a late Spring 2010 election. Or at least as far as my Business Economics lecturer's crystal ball can yet discern!