Liz suggests

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In hock

Wednesday, 12th March 2008

It seems to me that there are only two things of note to come from the Budget.

First, and really the only thing that matters, is what Andrew Neil refers to at Coffee House: borrowing.

The TV pundits still don't seem to grasp the enormity of the Chancellor's borrowing binge to come, all the more significant because of the borrowing binge we've already had. The sustainable investment rule, for example, is no more. It states that national debt must not exceed 40% of GDP. Even on the Chancellor's own forecasts it reaches 39.8% by 2010 which, given consistent underestimates of borrowing, means it will be broken. Add in all the off-budget items carefully squirreled away by this government -- from Northern Rock to PFIs to Network Rail -- and it will hit 45%.

Quite. The Treasury is now forecasting a £140 billion deficit by 2012 - £20 billion more even than the estimate last October.

Throughout the 1970s and 1980s the PSBR was a key figure to which we all paid attention. Borrowing has been barely mentioned in recent years. Maybe this budget will change that since even on the distorted Labour figures - without Northen Rock, for instance - the sustainable investment rule is shot through.

And that brings me to the second thing of note: David Cameron was, I thought, exceptionally good in his response. Full of facts and full of scorn - grounded in those facts and figures. He rightly emphasised the state of the public finances, and he seemed measured and in control of his figures, reducing Gordon Brown to the most dreadful dismissive smile in response. Can Brown have any idea how bad he looks when he does that? As for the rest of the Labour front bench - Matt is bang on:

Any citizen tuning in to the BBC to watch the Budget would conclude that we are governed by a wardful of maniacs. As Darling drones on, Jack Straw and Alan Johnson have their tongues lodged in their mouths. Ed Balls and Hazel Blears compete to nod like the dogs on the dashboard of a Ford Transit. Harriet Harman chides the Tories like an irritable headmistress. Ruth Kelly grins miserably. David Miliband looks on quizzically. Douglas Alexander slumps with abject melancholy as though he might at any moment burst in to tears...

Ed Balls was the worst of the lot, head bobbing up and down, muttering imprecations and looking the sort of nutter one would cross the street to avoid.

UPDATE: Fraser has the debt table here.