Darling, flanked by two identically balding accountants, was on peerlessly dull form. His bushy slugs rarely raised their heads above his wire-framed specs as he steadfastly refused to give MPs anything resembling a straight answer.
Today the Chancellor, Alastair Darling, delivered what was billed as one of the most important Budget speeches in decades. Backgrounded against rising unemployment and the prospect of deflation this was, in many ways, not an usual context for the unveiling of annual public spending. But with part and fully nationalised banks, unprecedented levels of public debt and a spiraling pension deficit the 2009 Budget was largely plucked from unknown territory. Here’s what the media made of it:
Alastair Darling says the UK economy will begin to grow again in 2010. Oh no it wont says the IMF and the Times’ Gary Duncan:
The IMF dealt a severe double blow to the Chancellor’s new forecasts barely an hour after they were unveiled.
The Guardian’s Larry Elliott says Darling’s optimism – even with record public debt projection – is misplaced:
He still believes that the combination of cheap money, lower inflation, a weaker pound and fiscal easing will deliver a V-shaped recovery, but has now put back the timing of the bounce until the end of 2009. This does represent a colossal stimulus and it may start to work sooner than the pessimists think.
Edmund Conway, writing in the Telegraph reckons that no investor worth his salt would touch Britain with a bargepole after today, as markets testified:
As soon as Alistair Darling sat down and the Treasury released the full details of its borrowing plans, the screens started to bleed red.
In the Mail, Quentin Letts satirises Darling’s biological inability to deliver any speech with more zazz than a bag of plain rice:
We sketchwriters used to think Gordon Brown the all-comers’ champion Budget bore but this fella makes Broon look like Ken Dodd.
The Standard’s Anthony Hilton feels a sharp, jarring pain along with 350,000 people whenever they reach for their wallet:
Making the rich pay up may be popular but there are not enough of them to raise the billions he needs.
The Times’ Danny Finkelstein, writing on Comment Central, is sure that Darling has handed a massive shiny present to the Tories:
In other words, until now the Tories could not oppose the 45p increase unless they were actually willing not to do it and fill the hole with some other measure in a campaign. Now they can distinguish between opposing it and giving an instant promise of repeal.
The FT’s Martin Wolf does not like the look of Darling’s books one little bit:
This is a horror story. But it could, of course, be worse: the economy may not recover as hoped; losses on support for the banks could, as the International Monetary Fund suggests, be far bigger than the 3.5 per cent of GDP now expected; and, above all, the creditworthiness of the British government could come into question, with devastating consequences.
Mark Deen, for Bloomberg, was bad news for drivers. And smokers. And drinkers. And rich people obviously:
Chancellor of the Exchequer Alistair Darling raised taxes on British motorists, smokers and the rich to contain an unprecedented budget deficit as he forecast the worst recession since World War II.
At the BBC, you know who focuses on something sensible like tax relief for businesses on capital spending:
Actually, it’s the increase to 40% in tax relief to businesses on capital spending, for one year only – which is forecast to cost £1.64bn.
Sky says that small businesses’ response to the Budget is the professional equivalent of sticking your ears out and blowing a huge raspberry:
As for the higher tax bracket increase, they shouldn’t have done this now, as now is the time in encourage entrepreneurs, not discredit them.
And finally, Tony Bonsignore at City Wire, makes the under-reported point that this 50 per cent tax malarkey carries a whiff of political posturing:
If there was ever a time for a shift to the left, for a political throw of the dice, then this was it.
On Monday, the Government predicted the percentage of national debt will reach 57% by 2013 and that the country would be back to ‘borrowing to invest’ by the beginning of 2016.
The obvious question is how on earth can they know that? Darling has been wrong before, forecasting a wildly optimistic national growth in his last budget. And compared to these days of wildly fluctuating markets, the last budget was a put-your-house-on dead cert to predict.
Yet he still was wrong. Now, at the same time as Bank of England suddenly decided that 5% interest was acceptable in a faltering economy one day and then 3% was better the next, how can Darling hope to predict anything accurately? It simply cannot be anything other than wild speculation or blind hope.
Mervin King’s favourite book in times of need is by a man called J. K. Galbraith, a sort of Nostradamus on Lithium. In Crash of 1929, Galbraith says:
There are two kinds of economist, those who don’t know what will happen and those who don’t know they don’t know.
Now Mr. Darling is no economist. But he could at least have the courtesy to admit that he knows more about Margaret Beckett’s underwear draw than he does about the economy.
Phillip Webster of the Times argues that after yet another broken promise from Mr Brown (this time about raising taxes,) New Labour is becoming very old hat.
The Times also has a rather handy questionnaire on the PBR, not that it’ll ever get to Mr. Darling.
The FT is concerned about how exactly Mr. Darling plans to pay back £120bn. That’s billion.
Fraser Nelson on the Spectator’s Coffee House blog argues that since the top 1% of earners already provide almost a quarter of all income tax, they already give quite enough, thank you.
Sunder Katwala on the Fabian Society’s blog goes further. He reckons that the 45p tax band will prove so popular, even the nasty Tories won’t oppose it.
And good ol’ safe hands Vince Cable agrees with Labour’s assertion that urgent action is needed. He’d just like to know exactly how such action will be affordable.
Tomorrow Alistair Darling will announce his pre-budget report – hailed by many as the most important in a generation. It will certainly be the most significant of his career.
It’s not the best kept secret that Mr. Darling will move to temporarily cut VAT to 15% as part of the Government’s £25bn tax relief plan. We can expect radical action from Labour and all-round head shaking from the newly-nasty Tories.
Apart from that, the content of the announcement is pretty much any one’s guess. Here’s what won’t happen:
Alistair Darling and Gordon Brown read out a joint statement sincerely apologising for the way they have destroyed the economy. “We got us into this mess with an unsustainable culture of easy debt and endless borrowing. But, trust us, more of the same is just what we need to fix it.” To reiterate his sincerity, Brown attaches a lie-detector machine to his temples, which immediately explodes.
After stunned silence reverberates through the chamber, David Cameron leads the clapping which slowly turns into rapturous, adoring applause.
Mr. Darling holds up his red briefcase for the cameras which falls open, exposing its contents as no more than an apple core and a Mr. Men book.
Cameron and Brown agree to ‘forget our differences’ before embracing in compassionate man hug, sobbing.
Mr. Darling criticises the EU directive keeping VAT at a minimum of 15%, calling EU commissioners “garlic-munching spoil sports”.
Nick Clegg puts forward an authoritative and exhaustively researched financial rescue plan that will allow Britain to avoid recession and reduce taxes whilst increasing public spending and employment levels. The plan is universally acclaimed.
George Osbourne sings the MPs out with a rendition of Chas and Dave’s “Ain’t No Pleasing You”.
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