NEWS: Tories play it safe with this Budget

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 significance.

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

significance.



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

relieved.



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