Budget 09: It's a confidence game...but the chancellor didn't show
Where do I stand on the Budget and Alistair Darling?
Here’s some thoughts. He was calm, composed, he did not look overly flustered. There was no hint of panic, no histrionics, no playing to the crowd. Alistair Darling looked and sounded like a man under control.
And lets hope he is because the country is submerged in a economic mire.
But what appeared to be missing from this Budget was a strategic direction, a vision of where we were and the way we would climb out of the trouble we’re in. Composed though Darling was, what he might have tried to do was inspire us.
That didn’t happen. And that’s a pity because, as one tax expert explained to me just before the speech began, what Darling really needed to do is fill us – the country, consumers and business – with confidence. Because economics is a confidence game. Convince us that everything is alright and we will go out and buy a new TV, a fridge, the red leather sofe we’ve always loved and, if we’re feeling particularly reckless, we might even buy a new car on a finance deal. If our confidence is reciprocated a bank might even lend a considerable sum of money to move home, start a new business or support the one we’re already running.
What I didn’t get from Darling was that electric bolt of confidence that told me we were going to be OK. Sure, he said we would start to emerge from recession later this year. But sadly the claim had the ring of over optimism about it. He didn’t really say it like he believed it. It was merely another statement that was read off his papers. Capital allowances, loss relief, maintaining small business tax at 21% – all his measures to protect the tax base – there was a lot going on under the surface, but there wasn’t anything that said: ‘This will turn the tide.’ In fact there was precious little reasurance. There was nothing that said: ‘This is how we will protect jobs.’ Or: ‘This is how we will inspire you go out and do business.’ These landmark policies, these moments that might illuminate a route through the gloom were missing.
The downturn in GDP this year, -3.5%, and this year’s budget deficit, £175bn, militates against an uplift in mood.
This even might become known as the Budget in which the chancellor fiddled. There are almost 100 notes on specific measures included in the Budget. Bits and pieces of avoidance, bit of this, bits of that. So many small fragmented things that at first it was almost impossible to make sense of it all. Let’s hope this Budget doesn’t become known as the Budget in which Alistair Darling fiddled while the economy…well, you know the rest.
If I take some solace from the Budget it is this. After bank bail outs, nationalisation, multi-billion pound guarantees, quantative easing, two G20 summits and countless other measures and meetings, Darling and the government may already be feeling that they have done all the big stuff that will help. there was nothing very much left for the Budget to do. The house had been built, all that was left was to tidy it up. Now, it is just a matter of time to see how the policies work out. It’s just a matter of time to see if confidence will return. Which brings me to the place where I started. Confidence. It’s a great trick if you can pull it off.