The Darling Buds of April

Saturday, 4th April 2009

I have stolen the headline to this post from a breakfast discussion held by "reputation management firm" Fishburn Hedges, where I was a guest speaker this week. Me and my fellow panelists were there to talk about the budget (coming your way on April 22nd) and give some idea of how the media gears up to the great day. I suggested that part of the problem with newspaper Budget coverage is that political journalists know very little about economics.

Robert Cole, a senior writer at the Times and the man who has run the paper's Budget coverage for many, many years, explained the excitement of the day and his biggest fear - theat nothing happens. Alistair Smith, who runs the media operation for Barclays explained how the big financial institutions gear up their response. Both were very entertaining despite the rather gloomy subject matter and economic outlook.

But for me the star turn was George Buckley, UK Chief Economist at Deutsche Bank , who explined the gravity of the situation with admirable clarity. I hope my notes and minimal knowledge of economics do him justice. Buckley explained that the worst year for growth in recent memory was 1980-1, when it increased by just one per cent. The latest predictions suggest that this year it will have shrunk by two per cent. He went on to suggest that the classic conditions for a full-scale depression already exist: starting the cycle with high levels of debt amid deflationary conditions. He then pointed out that the pre-budget report indicated that there was an eight per cent trade deficit (something with caused a sharp intake of breath inthe City at the time), but that the IMF beleives the figure is now nearer 11 per cent.

To have the economic situation expressed this starkly was something of a shock to me. I still haven't qute recovered. This Budget is being talked up as the "Budget for Jobs", but it is hard to see where Alistair Darling would find any extra cash to pay for job creation schemes, even if he wanted to go down that route. We all remember "the election that never was". This must not become the "Budget that never was".

Filed under: Alistair Darling (198 more articles) , Budget (194 more articles) , Deflation (2 more articles) , Economy (1024 more articles)

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Alf Tupper

April 5th, 2009 9:52am Report this comment

Buckley's comparison between the predicament of 1980/81, and our present troubles, is made even worse when we remember that the strife back then was orchestrated wilfully, in pursuit (blinkered and misguided as it was) of the long term viability of the UK economy.

No such vision drives today's events. This here mess is just a series of frantic, desperate damage control measures to see us through to the stupor of next Friday night.

Rhoda Klapp

April 5th, 2009 12:37pm Report this comment

The best way to approach a Brown budget (for that is what it is) is to assume everything is a lie, or a front for some deception. If anything apparently pro-job is announced, I'd be looking for it's actual applicablility in real life. Training is always one. Whence the jobs for those who are trained? What hoops need to be jumped through to qualify for training? Right now it's six months on the dole. You can't get a course unless you've waited, so those newly jobless can whistle for it. Once you get a course, it resets your clock so you are no longer six months on the dole, which is of course a 'metric'.

If there's anyting in this budget which helps a real employer take on one more person, it will be a shock to me. Meanwhile NI goes up and entitlements (paternity pay etc) go up.

Next day press is almost always unsufficiently cynical about the budget, and too concerned with minor tax changes for the 'typical family'. And of course the real detail is not available by press time.

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