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.

GETTY
Show Hide image

Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.