Forget the hype – Osborne’s Budget is an irrelevance

Expect no surprises tomorrow. In fact, the economic die has already been cast.

Tomorrow is the Budget, one of the great set-piece events of the Westminster calendar. A moment when governments rise and fall, and careers are made or destroyed.

Not this year. Forget the hype, diluted though it has been by events in Libya and Japan. Politically at least, George Osborne's speech is an irrelevance.

He could surprise us. Take the opportunity offered by Ed Balls to apologise for the grievous damage already wrought to the British economy on his watch and beg forgiveness. "The Chancellor stunned the House of Commons today when he concluded his Budget address by collapsing weeping over the despatch box and imploring the opposition benches, 'Pardon us, pardon us, we were wrong, so very, very wrong.' "

I doubt it. Osborne is not Cameron. While the Prime Minister's instincts are to scurry away from the sound of gunfire, his Chancellor is made of sterner stuff. He is perfectly content to court short-term unpopularity in pursuit of what he regards as long-term political gain. The axe is falling. Nothing will stay his hand.

There will be the odd populist nugget thrown out to placate the discontented mob. Fuel duty will be frozen. Possible taxes on air passenger duty.

There was also some briefing in the Sunday papers about training and measures to tackle youth unemployment.

But this is mere window-dressing. Deficit reduction, hard and fast, is the government's stated policy. Tomorrow will be a reaffirmation of that, not a repudiation.

There is obviously something personal at stake for the protagonists. This is Osborne's first proper Budget and Ed Balls's first Budget response. But these are two seasoned performers. Neither is going to make a major gaffe. Neither will allow the other a major opening. The immovable deficit reducer will meet the irresistible fiscal stimulator. They will both retire with honours even.

Indeed, both meet tomorrow more secure in their position than their respective principles. David Cameron and Ed Miliband are still the subject of muttering from their respective back benches. Osborne is regarded by disgruntled Tories as the man who puts the lead in the government's pencil. Ed Balls is the person who brings stature to a still inexperienced leadership team.

Ready for a change of heart?

That's not to say the economic battleground on which they will take up arms is irrelevant. Quite the opposite. The economy is the issue that will define our politics between now and the general election. But tomorrow is a sideshow.

Far more significant will be the release of the next set of growth figures. If they show the economy has indeed slipped into recession, then all bets are off. Labour's general critique of the government's strategy – and Ed Balls's specific attack on the pace and scale of deficit reduction – would be vindicated at a stroke. In that instance, Labour is back in the game.

If, on the other hand, the economy rebounds and the wrong kind of snow is seen as being responsible for last quarter's downturn, then it is Osborne who will feel vindicated. He will portray himself as the man who kept his head while those about him on the opposition benches were losing theirs. The mantra of tough decisions, courageously enforced, will echo once more.

There are no certainties. The public backlash against the Osborne austerity package could prove overwhelming. Losses in the local elections could enforce a change of a heart.

It could equally be the case that an economic downturn focuses public attention even more firmly on the reasons behind our economic collapse. The opinion polls asking who people most blame for the deficit and attendant economic hardship make stubbornly sombre reading for Labour.

Whatever the answers to these questions, they will not be found tomorrow. Though it provides political theatre, the Budget in truth rarely proves to be a political game-changer, especially so early in the parliament.

Even at the end of the parliamentary cycle, budgets rarely change the political narrative. Kenneth Clarke's refusal to offer profligate tax cuts in his last budget before the Tories' 1997 defeat was because he knew that whatever he flourished from his battered old box, the game was up. Last year, Alistair Darling tried manfully but singularly failed to convince the nation that the economy remained safe in Labour's hands.

The fact is that the economic die has been cast. Cameron and Osborne have made their choice. They have one policy: deficit reduction. For them, there is no alternative. They will live or perish by its outcome.

The rest, tomorrow included, is just gossip.

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Heathrow decision: 6 things we learnt about the third runway plans

Affected homeowners will get 25 per cent extra for their homes. 

After years of ferocious campaigning by both Heathrow and Gatwick to be the site of a new airport runway, Heathrow has triumphed. The government has accepted the recommendations of the Airports Commission and backed a third runway at Heathrow.

Confirming the decision, the Transport secretary Chris Grayling said: “The decisions taken earlier today are long overdue but will serve this country for generations to come."

So what happens now? Here is what we learnt:

1. It’ll be a while

Grayling said the draft policy statement will be published early in 2017. There will then be a full public consultation, before MPs get a chance to debate the details and vote on the proposals.

Only after that, will Heathrow be allowed to submit a planning application for the third runway.

2. Affected homeowners get a bung

Building a third runway will require the destruction of local homes, and Grayling said these homeowners can expect to be paid 25 per cent above the market rate. All associated costs, like stamp duty and legal fees, will be covered. 

3. So will the local communities

The government is promising £700m for insulating homes against noise, and it is floating the idea of a Community Compensation Fund that would make a further £750m available to local communities, although the details will be confirmed through the planning process. 

4. No flying at night

The government is demanding that flights are banned for six and a half hours a night to give locals some peace. Heathrow will also be expected to continue to give local residents a timetable of aircraft noise.

5. Air quality matters

Heathrow’s successful proposal included an ultra-low emissions zone for all airport vehicles by 2025. The airport can only get planning approval if it can meet air quality legal requirements. 

6. There will be a by-election

Zac Goldsmith, the MP for Richmond Park, is to resign in protest at the decision, and is expected to run again as an independent candidate. Speaking in the Commons, he warned that the decision to choose Heathrow was full of legal complexity and "will be a millstone around the government's neck". 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.