Letter from Westminster
There was a finance statement delivered this week and it was difficult not to feel some sympathy and admiration for the man delivering. It takes some political courage to stand up and tell your fellow citizens just how bad things have got with your economy and to spell out how bad the cuts are going to be and where they are going to fall. That, however, was what was done – by the Irish Finance Minister in the Dail.
Alistair Darling’s statement in the House of Commons was a different affair. The only thing that we were told in the course of his speech on which we can place total reliance was the fact that every prediction that the government has made about the depth and duration of the recession has been wrong. Undaunted, he continued to make the same assumptions about growth in the new year. Time will tell if he is right but in all likelihood by the time he is shown to be wrong we shall have had an election and solving our economic woes will no longer be Mr Darling’s problem.
In fairness it was not all gloom. The announcement of new tax rules for the offshore oil and gas industry which could make possible the exploitation of the gas reserves to the west of Shetland was welcome. It is something for which I have been asking for some time now and it would be churlish not to welcome it. In Shetland this can only be good news for our local economy.
Beyond that this budget was summed up by my colleague Vince Cable as being about bingo and boilers but not much else. Even the proposed measures on bankers’ bonuses looked like a missed opportunity. For chartered accountants it must be Christmas come early as an issue which should have been straight forward and popular has become an open invitation to the more creative in the profession to dream up tax avoidance schemes. The irony is that the penalties will be paid not by the bankers but by the banks themselves. The taxpayers now effectively own the banks. So the people who ultimately pay the penalties for outsize bonuses? That would be us.
At this stage in the economic cycle we could normally expect a comprehensive spending review. This would allow us to know what money the government has to spend and where they intend to spend it. No-one can pretend that these decisions are going to be easy but once they are made it will allow the country to make an informed choice at the general election. I presume it is for that for that reason that we are not to get this review until after the election.
One of the current speculations at Westminster is that the government may call an election in March of next year rather than waiting for May. This would be so they could fight an election campaign without producing a budget. It may sound cynical, but after Wednesday’s performance by the Chancellor it does begin to look more likely than it did.