As election speeches go, the Chancellor's was pretty boring. No big economic announcements – investors want to see tougher action to reduce Britain's national debt, but know full well they won't hear anything like that until the election is out of the way. A few tiny 'giveaways' here and there – though measures like the one-year business rates cut simply cancels out the rise coming in on April 1 thanks to revaluation...and so on. A few new quangos (a new 'green' bank, a fund for university businesses, a credit disputes agency) that we can well live without. Even a few marginal and long-drawn-out privatizations of things like the Tote. But that was it.
The election message – albeit delivered in a sort of bank-manager style – was that things are getting better. Tax receipts are better than feared, benefit payments lower, unemployment a little higher, inflation a little lower, borrowing down on forecasts. True. But then the Chancellor did not mention that the trade deficit had risen by £7bn or that business investment has fallen 5%. Nor that a government which was borrowing £6bn a year when it came in is now borrowing 27 times that, at £167bn in 2009/10 and another £163bn forecast for next year.
Alastair Darling thinks that he can halve the deficit in four years. In other words, the national debt will still be growing, but not quite as fast as the records that he is setting right now. Once again, he didn't mention it, but the national debt will have grown to £1.3 trillion by 2015, and will still be growing. But that is on his own figures, which predict a huge revival and turnaround for the economy, and forecast growth next year of 3%-3.5%. Phooey. Darling, and his predecessor Gordon Brown, have always over-estimated growth (or under- estimated recession) in their budgets. Few economists think that the economy will swing from a record bust to a record boom in the space of two years. And wasn't this government supposed to save us from all that anyway? No, this is a rose-tinted election budget. It has very little to do with economic reality.