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The Last Budget
Obviously, budget blogging is pretty late to the party. But I think there's a way in which not bothering with the budget is a valid point. It's been commonplace for years to say that budget day isn't what it used to be, but this year might have been designed to dramatise the point. There was a controversial emergency budget, and then there was a far more controversial Comprehensive Spending Review. And then there was an utterly inconsequential budget. Of course, the media faff was as noisy as ever. When the dust settled, though, it became clear that the budget was essentially a no-decision. The real decisions had been taken through the CSR process and the PEX cabinet committee; the Budget was merely an exercise in theatre.
And what theatre. The Treasury's civil servants have long since mastered the trick of shuffling bits of the budget about in order to generate a prescribed set of newspaper headlines and Sky News BREAKING NEWS NOW NEWS BREAKING flashes while maintaining the constraints set up in advance politically. The trick is to get the biggest possible return on publicity for the smallest net-net shift in the public finances. Gordon Brown was pretty good at this too, and no doubt Ed Balls will be.
However, this exercise is beginning to encounter diminishing returns. It is hard to imagine what George Osborne could possibly do on budget day to avoid having amazingly sycophantic headlines in the Sun and Mail. The owners have enough invested in the Tories, and vice versa, that no other course is thinkable. On the other hand, the papers sympathetic to the opposition either guess that the whole thing is a sham or else (the Guardian, of course) take up eight pages tearing down the micro-policies and concluding that nothing has changed.
So there's a real case for simply ignoring the whole thing. Actual project-funding, especially for capital expenditure, might well be better managed through the longer CSR cycle and with more input from the whole of government through PEX. If there's a need for a dramatic in-year intervention - like 2008-2009 or (depending on taste) mid-2010 - that could always be done, and just imagine the press joy of an! actual! Budget! whose contents were not entirely pre-briefed and indeed drafted purely for that purpose.
That said, the only really interesting thing that happened in the Budget was a dog that didn't bark. Alex Massie is furious about upping the tax on North Sea oil companies a tad, and the green lobby is hardly keen on dropping the VAT on fuel a tad. But overall, the scoreboard from the fuel tax changes was a wash - the tax change, which wasn't really a cut (rather, he forewent part of a planned rise), achieved a 0.1p drop in the pump price of petrol before being swallowed up by the world oil market.
This suggests that the government, institutionally, still has some resistance to perhaps the most pernicious policy the Tories could introduce. Once you let in the principle of subsidising road fuel, you've essentially tied the budget to a rising balloon. We may be close to peak oil production, we may be past it, or we may have a while to go. But nobody is predicting cheap oil. So the logic of subsidising drivers is simply putting off adjustment and burning money that could have been used for anything else. It's also burning oil that could have been used for anything else - it could have been kept for later, used industrially, or exported for hard cash.
And it's incredibly hard to stop, even if you're Mahmoud Ahmedinejad. Getting into the game of oil gimmies will eventually suck up the revenue that feeds the core public services, the public CAPEX budget (and therefore any non-oil infrastructure), the armed forces, you name it. Because oil prices are so volatile, once you get a significant line-item for subsidy on the budget, you effectively give up fiscal sovereignty. It's the modern-day socialism of fools, a cheap, toxic form of fake concern for the poor. Given how much the Murdoch press loves whining about petrol prices, it's a testament to the enduring strength of the Treasury as an independent institution that we haven't jumped down this particular rabbit hole yet. And, well, we're safe for another 12 month budget cycle.
3 years' CSR would be better, though.