With only six months left until the general election, the Budget was
going to be either a shameless vote winner or a bit of a damp squib.
Those marketers not affected by the Chancellor’s direct imposts may feel
that every Budget is a damp squib, but that is to underestimate their
Apart, obviously, from revealing the government’s intentions on tax and
public spending, the Budget is a barometer of overall economic
confidence. Viewed this way, the Lawson Budgets of the late 80s,
regarded now as over the top, were more or less what we in the boom-boom
80s wanted and deserved.
Mr Clarke’s last Budget before the election can hardly be said to be
naked electioneering. Just the modest titbits of 1p off the basic rate
and higher tax thresholds - to show he is a proper tax-cutting Tory.
Marketers are right to see steady economic growth of between 2% and 3% a
year as encouraging - it is putting money into people’s pockets and
building consumer confidence. But this is not the time for a government,
understandably preoccupied by the forthcoming verdict of the electorate,
to jeopardise positive trends in the economy.
Inflation is down but not beaten. Higher interest rates, only 1% lower
now than they were approaching the last election, would stifle that
growth and mug the housing market. Public borrowing is still at an
unacceptable pounds 26bn and the balanced Budget won’t come until beyond
2000. Mr Clarke eschewed a political Budget.
It is to his credit then, that this final budget of the Parliament was
sober, responsible, boring. It is precisely this sort of stewardship
that Britain’s recovery needs, and for that marketers should be