The budget: an exercise in futility?

Yesterday Gordon Brown announced his intention to hold the Budget on March 24th; increasing speculation surrounding a May 6th General Election.  But is there really any point in holding a Budget?


Strictly speaking, yes.  A Finance Act needs to be passed in order to enable the Government to maintain its tax-raising powers into the new financial year.  However, given the fact that last year's Budget was revealed three weeks after the start of the financial year, there does appear to be leeway on this issue.

All Gordon Brown really needs to do is to pass a short bill implementing the tax changes announced in the Pre-Budget Report back in December.  He could even win a few votes in doing so...

The Conservatives have promised to perform an emergency Budget within 50 days of entering office should the win the upcoming General Election, and I imagine that Labour may well be contemplating the same.  All Gordon Brown has to say is that the election is as much about who is going to run the country, as it is about who the public trust to make the next Budget.  Throw in a few mentions about how only having one Budget this year will save money and I'm sure he will persuade a few floating voters to come over to the dark side.

Logic, however, says that this most likely will not be the case.

As mentioned before on this blog, Brown knows that he and his party are in trouble and will have to do everything to keep voters onside and also to win new votes.  The Pre-Budget Report was testament to this given its lack of hard-hitting measures whilst throwing some nice juicy bones out to the Labour core-vote.  Don't expect much different from the Budget itself.

Expect lots of pre-election giveaways and incentives to be dangled temptingly in front of the voters' noses coupled with the caveat "you'll only get this if Labour win"; aimed at pulling the wool over voters' eyes.  The plan will almost certainly be to promise lots in the March Budget, and then take it all away again in a June Budget once Labour have fooled the country into giving them another five years on the bridge of a rudderless ship.