Wednesday, April 22, 2009

Darling's Budget Bunkum Laid Bare

A decade of reckless and irresponsible government is set to be laid bare in today's budget bunkum, as the Laurel and Hardy comedy act are finally forced to come clean over the fine mess they've got us into. 

The treasury and ministers threw usual budget caution to the wind as a heady daze of positive spin over chancer Darling's pre-election budget was slowing dripped out to mask the rotting stench of fiddled expenses and disgraceful Tory email smears. 

No doubt the budget will be full of that widely-leaked and well-spun greenwash and hogwash. 

But the brutal fact is that as the dire state of the economy is laid bare - everyone will be much worse off for a decade to come. 

Expect lots of tinkering around the edges. But no amount of 'greenwash' or hyped-up optimism about 'green shoots of recovery' and the worst is over, can mask the depth of the horror story about to unfold.  

If would help if the country had a chancellor who could count. 

Living in his own fantasy world, Darling's pre-budget report last November, promised that recovery could be under way by this summer. Fat chance. Both his first budget in March and the PBR were about as wrong as he could get, making a nonsense of government borrowing projections. 

Add to this the ever-rising costs of bailing out the banks and the smoke and mirrors PFI accounting and the scene is set for a budget catastrophe. 

The reality is that public borrowing has soared to £95 billion, £16.9 billion more than forcast, suggesting a deficit of £150 billion next year,  a shocking 11 percent of total national output. But output is set to fall by a full 3.7 per cent. Unemployment is rising at an alarming rate.

But the chancellor will have no room for manoeuvre, after the Bank of England boss told him to stick his 'fiscal stimulus'. 

So instead the country faces soaring public debt and the worst year for the economy since the end of the Second World War.

Cash has been flowing out of the public purse like there is no tomorrow, on unemployment and welfare with the public sector still creating ever more non-jobs.

But the faster the economy shrinks, the smaller the income, delivering a double whammy.

As a result, the country is facing a future of borrowing and mounting debts on a massive scale with national debt, soaring from 42.3 per cent of output last year eventually climbing above 80 per cent when the bank bail-outs are factored in - the highest figure since records began.

Nothing can disguise the historic scale of the fine mess this hapless New Labour pair have created and the budgetary shambles the country is now in. 

The UK faces a bill of almost £200 billion for propping up its ailing banking system, according to the International Monetary Fund (IMF), before it was forced to back-track on the forecast. That's 13.4 per cent of the UK's entire economic output of £1.46 trillion in 2008.

But, with an eye on the elections and not the well-being of the country, Darling is expected to come up with paltry and feeble savings of just £15 billion, mainly by cutting back on Whitehall waste, neatly avoiding Tory slash-and-burn cuts and burying his head in the sand over the bold moves advocated by the centre-left.

Somewhere down the line the books will have to be balanced and that means busting New Labour's election pledges over tax rises and some serious spending restraint. 

So when the budget dust settles the questions, so astutely put by Burningourmoney's  'haystack watch', remain. Is Darling's borrowing forecasts now realistic and are his measures to cut public spending credible? Just how much is he going to raise taxes? And how will he attempt to disguise it?

It would be refreshing if just for once Darling delivered a budget which would finally lay to rest the squandering of the false boom-time good-time years, starting with bold plans to scrap wasteful white elephants such as Trident, ID cards and the quangos, while at the same time doing something realistic to eradicate child poverty. 

Brown and the Downing Street New Labour spin machine staked everything on a pre-election grid with its peak of a wildly successful G20 summit and a budget 'for the future'. 

But the G20 summit sham was swiftly exposed as a con. When the dust settles and the bones are picked over, Darling's budget will go down in history as the one which laid out in glorious gory detail just how voters have been led down the garden path, suffering from the worst public finances since the War. 

Few believe this will be an election winning budget. Few believe there'll be surprises big enough to encourage the usual glowing hyped-up morning-after headlines.

Instead expect a smoke and mirrors budget where the devil will be in the dire detail, the perilous economic state laid bare and a country left wondering how much longer they will have to put up with the struggling sham of a fag-end government run by a comedy double act, which no one finds in the least bit funny.  

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