Things can only get worse? Can they?
Now we have all been massively prepared by the Coalition for the worst, I suspect that today’s emergency budget may not be as bad as trailed. That’s all part of the New Labour style media management which Dave and George learned at the feet of the great masters, Blair and Campbell.
There are two grounds for caution here: first, if that is the case, they need to be careful, because as Blair found out, the media and public aren’t that dumb and don’t like being suckered more than once – or twice maybe.
Second, even if the budget is not as tough as expected, it is still likely to take a lot of demand out of the economy.
Bear in mind that Darling had already pencilled in the biggest spending cuts since the early ’50s – far bigger than Jim Callaghan’s late ’70s cuts or anything Lady T did (she, of course, never cut spending – just held it steady for a couple of years – please note all you commentators who seldom question the received wisdom that the Tories devastated public spending in the ’80s).
Then factor in that we have just gone through the steepest post-war recession and that demand is still in intensive care – you see where I’m going with this?
Getting a grip on public finances, good; reassuring markets, also good; getting shot of a load of the bad stuff early in the parliament in the reasonable hope of blaming it on Brown – and better things to come (hopefully in time for the next election) – fine too.
But going too far and threatening the recovery – not so good. Delicate balance, to be sure.
