The pips squeak

Wednesday, 22nd April 2009

The Spectator on Budget 2009

On Budget Day, Alistair Darling achieved something rare among chancellors of the exchequer and unique among members of this Labour government. He actually made us feel sorry for him.

By common consensus, he faced — with a stoical calm that has come to be admired even by his opponents — an almost impossible job. Markets and taxpayers wanted him to unveil a strategy to set the public finances on a long-term path back towards fiscal balance without crushing fragile indications of a distant recovery. The Prime Minister clearly wanted him to regain some political ground by being seen to address the sharply rising rate of job losses, while dishing out some fiscal punishment to the rich in a way that would trip up the Tories. The last of those objectives was certainly achieved: the new 50 per cent tax rate for top earners was the only rabbit in the hat of this Budget.

Our fellow-feeling for the Chancellor before his speech began was provoked by the fact that Darling himself bears far less responsibility than the Prime Minister for the staggering level of public borrowing requirements he had to announce, hitting £175 billion this year and a peak of almost 80 per cent of GDP. And although Darling’s pre-Budget forecast last November — that the UK economy would return to growth in the third quarter of 2009 — looked fantastical even as he said it, his much-derided earlier remark that we were heading into ‘the worst crisis for 60 years’ turned out to be spot on.

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