The more you study the Recession Budget, the more it hits you: this horror story is a best-case scenario. It’s based on almost comically optimistic assumptions. We are apparently halfway through a recession that finishes next May. Then growth starts again, they’ll magic up £5bn of efficiency savings and the rich will somehow break the habit of a lifetime and not find accountants to get them out of paying extra tax.
Darling may as well have finished his speech saying “and we’ll sprout wings and fly to neverland” because that’s the gist of his forecasts. It is strikingly unoriginal. Brown has done what he has always done: borrow, based on fake forecasts that he’ll have to tear up at the next Budget blaming yet another unforeseen economic event.
Make no mistake: the staggering, sickening borrowing levels we see today are the opening bids. They don’t include the banks, who may yet implode on the public balance sheet. They assume everything going swimmingly from now in. Upshot: we are as a country just embarking on an epic budgetary disaster. Next year we’ll have debt levels of 60.5% of GDP on a Maastricht basis. That is twice that of Spain, Sweden and Ireland, three times that of Denmark and comparable to Hungary (the only country in Europe with a larger budget deficit). And while Italy has 107% debt, its household (as opposed to gvt) debt is less than half ours. None of these countries, not even post-Soviet ones, have hidden government PFI debt.
All that agonising work the Conservatives did turning the situation around in the 1980s: ruined. It took Brown ten years to destroy his inheritance – but by Jove, he’s done it now. Tax the rich, spend like mad and destroy the public finances. The true Brown was here today: Will Hutton is punching the air, Old Labour is back – and things can only get worse.
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