Yep, it’s that time of the year again – when the government starts briefing about the contents of the Budget. First up, there’s the news that Alistair Darling may cut projected borrowing figures by £5-10 billion, thanks to higher-than-expected tax receipts. And then there’s Peter Mandelson’s claim that new tax rises would have to be considered a year from now – implying, perhaps, that there won’t many in this year’s Budget.
Many folk around Westminister were surprised that the government was putting out a pre-election Budget – especially given the sorry state of the public finances. But Labour’s plan is becoming clearer now: lower borrowing figures, no significant tax hikes, a few public spending giveaways here and there – all this will be sold as progress, of sorts. And as for already-announced tax rises, such as the national insurance hike, the government will hope that it has already taken the heat for them.
In which case, it will be the Tories’ task to point out that the odd £5-10 billion doesn’t stack up to much in the face of annual deficits of £170 billion and – crucially – a debt burden which will soon be pushing £1.5 trillion. In getting that message across, they may well be helped by the markets. All will be revealed next week.
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