Daily View: Emergency Budget
Commentators discuss Tuesday's emergency Budget.
that George Osborne can afford to be bold with his cuts:
"Given the vast size of the hole in the public finances, he could be forgiven for thinking that he's in a difficult position. In fact, he's in the strongest position in which he will ever be. Everyone knows the situation is not of his making and the support of two of the three main parties should sustain public support for the difficult decisions that lie ahead."
Conservative MP [subscription required] that "wielding the axe will not work without a radical effort to boost the private sector"
"[The Bank of England] next need judgment and understanding of the economic cycle to give the economy the cash it needs to function without encouraging another credit-fuelled inflation. Their money-printing kept the public sector economy going, but did not filter through to the private sector, because of strict constraints on banking cash and capital. New regulation is needed to balance the economy, rather than hogging all the cash for the State and driving the pound down too far in an inflationary manner."
The : "the Tories have a plan for cuts but do they have a plan for growth?":
"Cut Government spending on keeping the economy running and unemployment will grow and the burden on the state will increase.
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Instead of the deficit decreasing, it will increase as more and more people join the dole queue. That's why cutting the public sector before you have got private sector prosperity is dangerous for all of us."
that Tuesday's Budget will be a sombre occasion for George Osborne:
"Osborne is not expecting to get a good press, but is comforting himself with the old Ken Clarke dictum that the worst budgets are those that get the best headlines the following day. His argument will be that the risks to growth from deficit reduction are smaller than those from the increase in interest rates that would result from the financial markets cutting up rough."
that Mr Osborne has to find the right language:
"There is very little that the Chancellor can do to promote growth. So many of the factors are not under his control. The two most important are the animal spirits of the British middle classes, and luck. This is where the politics comes in. He has to get the tone right. While not shirking the bad news, he must persuade us that it will not last for ever. Although it is difficult to find fresh ways of expressing those traditional Conservative themes, opportunity and enterprise, Mr Osborne must find the language. The speech needs three phases: grimness, aspiration, inspiration."
Mr Osborne of seeing the economy "as a giant seesaw":
"There is a seam of orthodox economists, and rightwing politicians, who have believed that the simple act of cutting public sector jobs will create them in the private sector - that because it can be written as an equation the real world must fall into line. But, as the Office of Budget Responsibility notes, the recent past teaches us that government support for demand can make a difference."
[subscription required] that this Budget is going to be a test for the coalition government:
"If the Budget is shown to have discriminated against the poor or against the less prosperous regions beyond the M25 - whatever the coalition might say - tensions inside the Lib Dems are likely to emerge."
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