A Budget Bore for All

Yesterday’s Budget from Labour was another non-event, it offered a little bit for businesses and first time buyers but was effectively an hour long political speech

What is lacking from both the Labour and Conservative Party is how the huge deficit would be cut. Lots of rhetoric and wait until after the election, but it’s not being very straight with the electorate who are expecting some kind of action.

The Liberal Democrats have identified £15bn of cuts already, which doesn’t go all the way, but shows we at least have a plan and we’re telling the electorate up front. This will come from ending government contributions to Child Trust Funds to removing the top 20% of claimants from the tax credit system, cancelling the ID card programme, no like for like Trident replacement and abolishing the Government Offices for the Regions.

The other notable absence in the Budget was any plans to deal with the banks, which are fundamentally still operating in the same environment as pre-credit crunch. The Liberal Democrats would split every day retail banking from casino investment banking and protect the voters savings and investments. Yes retail banking will be very boring, low margins and pretty risk averse, but it’s important that people can trust where they put their hard earned money.

In an IPSOS MORI poll Vince Cable was seen as the most capable Chancellor of the Exchequer, followed a long way back by Alastair Darling and George Osborne bringing up the rear. You can decide for yourself if you watch Channel 4s “Ask the Chancellors” Monday 29 March 8pm


“It’s the economy, stupid”

In continued recognition of Liberal Democrat’s economic competence, The Financial Times and Economist in the last few days has criticised both Conservative and Labour’s honesty and openness on the necessary actions to control the budget deficit whilst commending our plans and approach.

George Osborne get’s a particularly strong attack from the Economist

“One explicit difference between Mr Brown’s plans and Mr Cameron’s is that the latter wants to start cutting this year, despite the risk of stalling the crawl out of recession. In that, he is probably mistaken, just as he was wrong to oppose Mr Brown’s fiscal stimulus. In both cases, the Tories may have subordinated sensible economic thinking to political positioning.”

The Liberal Democrats have been explicit in some of the actions necessary to cut the deficit identifying areas like Trident, ID cards, scrapping child trust funds and a 10% tax on banks profits. However, unlike the Conservatives, the cuts will be made at the right time when the recovery is clearly happening, rather than straight away and derail the recovery.

As I’ve said in the first Focus of 2010, do we want Vince Cable, with experience in industry and a PhD in Economics to run the economy or George Osborne with his lack of expertise and experience and would be learning his trade at the country’s expense…