Peter Hoskin

Lawson expects an emergency Budget

Lawson expects an emergency Budget
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Oh yes, there will be spending cuts, and they'll have to be big.  That's something CoffeeHousers knew already, of course - but it's a message which is worth repeating if our country's going to have anything like a chance of overcoming Brown's debt crisis.  So bravo to this morning's Guardian, which spells it out in a public spending special*.  They've got the IFS on board to describe how we'll need 16 percent cuts across all departments if the two main parties commit to ringfencing health, education, overseas aid, defence etc.  There's a survey of the views of certain think-tanks, consultancies and policy wonks.  And interviews with four former Chancellors - Lawson, Howe, Healey and Lamont - who also set out the case for cuts.

It's all worth reading.  But perhaps the most striking passage comes in Nicholas Watt's interview with Lord Lawson:

"Lawson expects David Cameron to follow the example of Howe, Margaret Thatcher's first chancellor, who held an emergency budget within 40 days of the Tories' 1979 election victory. 'To wait until the following March or April would be disastrous,' he said. 'They have probably got to do what we did when we came in in 1979. We came in, in May, and had a budget 40 days later.'"

To my mind, an emergency budget is both an economically and politically wise move.  Given the scale of the fiscal crisis, the markets will need reassuring asap that the Tories have solutions to offer.  And the Tories themselves will want to set out just how catastrophic their inheritance is, to get the public on side for the tough measures they'll have to introduce over the following years.  So pencil in George Osborne's first Budget for August 2010.

*Although this is only day one of a two-day special report, so there's the chance that they'll present a diferent take tomorrow.