Comment on the Budget - June 2010

My recollection is that blanket media coverage of the budget always lasted until the following weekend and often got another lease of life from the Sunday papers which then discovered something significant in the small print to which prominence could be given.   I am surprised therefore, at the way the news agenda has moved on so quickly in the last week, after what was the most austere, even ferocious budget in living memory. I don’t think it was just the effect of the World Cup. Rather, I think the explanation lies in the way the budget measures were explicitly stated in the detail of the Chancellor’s speech.

Over the last 13 years we have become accustomed to so much of the budget not being mentioned in the speech at all and instead, commentators, politicians and journalists had to unearth the true significance of the budget by ploughing through the tables in the Red Book and checking through the reams of  press releases from the Treasury that began to hit the fax machines the moment that the Chancellor sat down. This time it was refreshingly different, the whole news story was spelt out in the speech.

My impression is that the public appear to have breathed a collective sigh of relief that the budget measures were not even tougher; and moved their concentration on to more immediate concerns. The budget, will however come back to bite us. It was the budget for a whole parliament and many of its measures do not start to take effect until next year.  

This budget set out to deal decisively with disastrous state of the public finances where, for every £4 that government now spends it is borrowing one of them. The problem is one of too much spending and not that we don’t pay high enough taxes. The implication of the budget speech is that most government departments are looking at a truly massive cut of 25% over the life time of the parliament.

We will not know all the detail, and therefore the true implications of these cuts until later this autumn. They will certainly be a great talking point then. It will be very painful but then, we simply cannot go on unfairly storing up the bill for our children and grandchildren to pay later. Ultimately it comes down to a question of morality.