Morning:
9°c
- Drinkers hammered: beer up 4p, wine up 14p
- Non-doms 'still wary' of Darling's tax plans
- More tax on drink - you'll drive us all to Calais, Darling
- The party's over and the day of reckoning dawns
- Quiet man who has proved too meek to inherit Brown's legacy
- An ideal messenger - he makes the shocking sound dull
- Darling struggles to deliver crowd-pleasers
- Darling's in a hole but Brown is to blame, says Cameron
If ever there was a Budget that we did not want to be exciting, it was today's. By common consent, the world economy is in trouble - potentially deeper trouble than at any time since the 1970s. The only real question is how hard it will be for the UK, with its heavy dependence on financial services and property, to get through the coming storm.
Today was not, therefore, a time for political pyrotechnics, not an occasion for the Chancellor to show how creative he could be. Rather, those watching the Budget were looking for reassurance - hoping to be able to take comfort from the fact that, whatever problems lie ahead, at least the Chancellor knows what he is doing. It was a time for Alastair Darling to revive his much-tarnished reputation as a safe pair of hands.
To some extent he did it. Complete rehabilitation with one bound was probably expecting too much, given the damage done to his reputation last autumn by his inadequately thoughtthrough proposals on capital gains tax reform and the taxation of non-doms.
There are many, both in the City and in the country, who will never forgive him for the trust betrayed, the damage done and the confidence shattered. But he has a style suited for today's occasion - a deadpan delivery which verges on the dull and which quite belies his private persona, which is both warm and witty. His solemnity matched the difficult brief he had to impart.
Budgets fall into two parts. There are the populist measures which capture the headlines - income tax cuts, increases in petrol taxes, extra help for pensioners and so on - most of which sound good but lack substance.
Then there are the economic forecasts and public-finance figures, which sound dull but really do matter, because when all is said and done it is the performance of the economy that pays for the handouts. So there were really only three things we needed to watch out for: the forecast growth rate, the trend in tax revenues and the amount the Government will have to borrow to make ends meet.
More specifically, now that we have had the years of plenty, we wanted to learn from the Treasury how marked it thinks the slowdown in growth will be, and how long it will last.
This time last year the assumption was that the economy would be growing at upwards of 2.50%, which reflected the optimism of recent years where growth has at times been over 3%.
Darling's forecast today was that we should expect growth of between 1.75% and 2.25%. This is a cut of about a quarter of one per cent - but is still significantly better than most outside forecasts, where the floor is put at 1.5%.
He says Britain is better-placed than most economies to withstand the global slowdown. Time will tell who is right.
As important as the extent of the expected slowdown is its likely duration. Here Darling again risks being accused of over-optimism.
Some of the nation's most prominent businessmen - like Sir Martin Sorrell of WPP, for example - have gone on record as saying that they anticipate next year will be worse than this, on the grounds that it will take time for the troubles in the banking sector to work through into the wider economy. By contrast, a more upbeat Darling anticipates growth for 2009-2010 will be between 2.25% and 2.75%, and will reach an even better 2.5% to 3% in the year after that.
But then he would say that, wouldn't he? With the possibility of a general election next year, he has to give hope to his backbenchers that the economy will be doing well when they go to the voters.
If he had been as miserable about economic prospects as some outside forecasters, those backbench cheers would have been even more muted.
Even as it was, his Labour colleagues did not have very much to get excited about, because so much of what Darling tried to present as new had in fact been previously unveiled.
We knew there would be increases in tax on luxury cars and air tickets - thinly disguised as green taxes designed to save the planet. We knew there would be a renewed effort to channel more money to low-income families to try to reduce the incidence of child poverty, which remains embarrassingly high for a government already in office 11 years.
We knew that the basic rate of income tax would be cut to 20p, and that there would be parallel reductions in the taxation of company profits, because Gordon Brown announced those with a flourish 12 months ago. We even knew that the implementation of the routine increase in fuel duties was going to be deferred until October - presumably to minimise the risk of protests.
And so to the verdict. Perhaps the fairest thing to say is that Darling tried hard, and that given the hand he had been dealt, he could not really have done much better.
