Master Gideon's second budget was really quite unexciting. What changes there were were moderate and predictable.
A bit off fuel; a bit more tax on the oil giants. A bit off company tax; a bit more bank levy. Another step towards the £10,000 personal allowance.
Then Mr Potato Ed stood up and read out the speech he'd written a month ago.
"Same Old Tories ," he said, "you're just robbing Peter to pay Paul."
He doesn't seem to understand: ALL government spending "robs" (taxes) somebody to "pay" (spend on) somebody else.
Perhaps Mr Bully Balls has been "explaining" it.
If you WANT to take less tax from one person, or more realistically one GROUP of people, then you have just TWO choices: either you SPEND LESS or you have to take the tax from SOMEONE ELSE.
(Yes, you can BORROW it, but that's only taking it from a "someone else" who just happens to be in the FUTURE, i.e. when they are the someone who will have to pay back your borrowing.)
Last year, in the emergency budget and then in detail in the spending review, we decided how much we would cut spending this year, and so how much we would raise in taxes (and how much borrowing we would need too).
We haven't changed those numbers.
And that's GOOD because last year's budget was quite painful enough already! Cutting spending even more would be AWFUL. But equally, cutting spending less would only PROLONG the AGONY – if you're GOING to take a trip through HELL, swerving from side to side is only going to make it take LONGER!
So Master Gideon's budget was what we call "fiscally neutral" which just means it raises the same AMOUNT of tax but in different WAYS. Or in Mr Ed's language: "choosing to rob different people".
For example, with the cost of fuel rocketing, the Government could hardly fail to curb the fuel tax escalator, and that's what Gideon did. But forgive me if my heart fails to bleed for the oil companies whose super-massive profits will be taxed a bit more to raise the same amount of money from them instead.
What we're doing is moving the tax burden from families who are finding it hard to make ends meet because of the price of petrol going through the roof onto the oil companies who are seeing their profit margins soar because of, er, the price of petrol going through the roof.
When Hard Labour do this, it is called "redistribution"; when the Coalition do it, apparently, it is called "robbery".
Someone clearly slipped Mr Ed a bit of paper at the end of his peroration, pointing out that his reply to the budget speech had not actually mentioned any of the points IN the budget speech, so he tacked on a bit about the 1p cut in fuel to say "ah ha, but you put up the VAT which added 3p to the cost of petrol! Ha!" So, what, Mr Ed would have preferred us to KEEP the fuel escalator price increase and put petrol up MORE? What's that you say? Hard Labour would have reversed the VAT increase? If you were PAYING ATTENTION you would have heard Master Gideon say he'd LOOKED at that and it would have been ILLEGAL.
And of course it would have been three times as EXPENSIVE. That is, we should have had to raise three times as much tax from somebody else to make up the difference. Or cut spending by ANOTHER six billion pounds on top of all the cuts that have been forced upon us already.
(And that's why Gideon didn't reduce the duty by THREE pence and cancel out the VAT increase – it would have had to come from somewhere!)
NEITHER of these options are in the Hard Labour way of budgeting: they would DUCK the difficult choice and just BORROW the difference.
Which of course is robbing Peter's CHILDREN to pay Paul.
And remember, the WHOLE POINT of this Age of Austerity is so that we STOP DOING THAT!
That's why we've raised more in taxes – VAT, National Insurance, bank levy and others – and why from next month we really start with these awful spending cuts. It's not for a laugh or for ideology or through sheer bloody-minded ignorance of the state of the economy; it's so that we will start to close the gap between what the government gets in and what it pays out.
This, fundamentally, is the difference between the Coalition's position and the one that Hard Labour are espousing (as much as they'll admit to ANY position): WE say that we have to get the country's finances under control in order to achieve economic growth; Mr Balls says that you've got to achieve some growth before you can hope to get the country's finances under control.
This is why he reacts with such GLEE to every new BAD statistic that comes out. He likes to say that the economy was in recovery until the Coalition yanked out the IV drip of continued borrowing.
Don't get me wrong; I'm not saying that the figures are NOT bad; in fact I think they are appalling – inflation is up (again!) to 4.4%; unemployment is up (again!) to a seventeen year high, and, worse, an ALL TIME high for youth unemployment; and in some ways worst of all, Government borrowing, the POINT of the whole thing, after a good month in January is up (again!) in February.
But I do not think that these are our fault. Economies just don't turn around that quickly. We were left with an economy badly damaged from the banking crash that, far from recovering, was in fact screaming out of control just as Labour were ejected from the driving seat. Keynes may be RIGHT that you can kick-start an economy out of recession by investing in public works, but Labour have spent YEARS borrowing money to fund the ILLUSION of economic activity – public sector jobs and construction projects – so much that it's now a busted flush. Like the Wizard of Oz you HAVE to keep beavering away behind the curtain JUST to keep up the illusion, because when you stop, well, THIS happens!
So I think that these figures are a RESULT of a decade of Labour's mismanagement, covered up by borrowing and now revealed as we stop shovelling money into the black hole they've left.
Of course, Mr Balls, contrariwise, says that the figures are caused by US, by the Coalition's plans to bring borrowing under control i.e. caused by the cuts that, er, haven't happened yet, just as December's poor sales were caused by the VAT rise in, er, January.
Of course, Mr Ball's ALSO says that there was NO structural deficit during Hard Labour's time in office. Well, since they clearly DID run a deficit every year, he must be saying that his government presided over an EIGHT YEAR LONG RECESSION. And THEN hit the banking crash!
So if SOMEONE from the Hard Labour front bench tells you that if they had still been in power there would NOT have been a contraction in the fourth quarter last year… you can be sure that it's BALLS.
PS:You may well think that I've concentrated too much on Mr Potato Ed's REPLY to the budget, but really, Master Gideon just wasn't that INTERESTING.
With not a lot of money left, there were lots of LITTLE schemes – enterprise zones, apprenticeships, support for first time buyers, some stuff with railways – but nothing startlingly major. After all, there are only so many ways he can say: "No changes; economy still rubbish; nothing to see here."
PPS:Lib Dem manifesto, front cover, pledge to increase the basic allowance to £10,000 by the end of this Parliament; today's Budget, another big step to delivering.
Tory manifesto, big speech by Master Gideon, pledge to cut Inheritance Tax; today's Budget, umm, tax cut limited to charitable giving.
I think that's what we call a LIBERAL DEMOCRAT-Led Coalition.