Sky News business editor Michael Wilson

When it’s all getting a little anxious, the wise Chancellor tends to give a little feelgood and spray around a little public spending to keep things ticking along. Alistair Darling’s first one did a little of both – but the big, unanswered question is still how fragile the whole economy proves to be.

The private equity wizard Jon Moulton shivered when he heard the amount of government borrowing which Labour will need next year. "Whatever he does, it’ll be wrong. And it’s not his fault, necessarily. More borrowing, interest rates have to go up; less growth, interest rates have to come down; more inflation, interest rates have to go up. All the same time? I wouldn’t have his job."

Well, the House was quiet as Darling ‘fessed up to some of the woes. A little more candidly than his predecessor. Borrowing is still going to be huge - £42bn for next year, comfortable above City estimates, and inflation isn’t going to be back on course until next year.

Veteran City observer, Gerard Lyons said: "He talked of strength and stability – but his real fear was vulnerability and exposure to a global slowdown. Even with a small slowdown, the borrowing figures are awful. If the slump gets worse, the economy will fall to pieces."

That said, the Chancellor ticked all the boxes of his core support. George Bull of Baker Tilly said: "It was important to be seen to be reassuring – tax the social bads and reward the social goods."

The big numbers in the small print tell the story – smokers, drinkers, drivers and North Sea oil companies pay for child benefits, pensioner aid and charities. Broadly neutral with very little to boost the economy, except help for small and medium companies to get a larger slice of public sector contracts.

It felt shallow, redistributive and intensely political. A straw poll with my experts on the programme today suggest an election in spring 2010.

Comments

[peterfieldman paris france 26 Mar 2008 14:13:48]

It is time Governments intervened to curtail rampant speculation in the financial sector. I invite you to see the comments on my blog on the necessity for a redistribution of wealth
www.pfieldman.blogspot.com

[michael wilson 13 Mar 2008 16:03:21]

well..for a budget that did very little, it seems as though the Chancellor has singlehandedly shot the 'feelgood' factor..
thank you for all your thoughts..although, as i say in today's blog, wer'e not technically in a recession, it certainly feels like one, especially with all the price rises which you mention..we'll start a sort of 'recession watch' soon..i'd be very interested to hear more of your experiences..

regards

michael

[Rodger Costello 13 Mar 2008 14:54:56]

Yet again more tax to the working classes whose salaries and income are not rising which was also reported on today!!
David Cameron was quite right in his comments as nothing but stealth taxes in any area possible.
I just hope the monies from enviromentally freindly taxes go to the cause and not used to fund the london olympics as seems the case. Mind you road tax doesnt go on the roads so no reason why it will go on enviromentally freindly causes also like air taxes!!
Vat on new cars is obv 17.5 % now and additional £950 on top of this there is only one winner for sure and the names Gordon Brown in all areas!!

[lex glasgow. 13 Mar 2008 14:18:54]

get real you lot of moaners and wake up. The cold hard fact is we haven't been paying enough tax at source for 30 years, hence numerous stealth taxes. (doesn't excuse them for wasting billions right enough). and Ellie from Wales, why are you having so many children if you are relying on state handouts?? Oh another thing, a litre of beer in my local (a dump), would cost me £5.20. Petrol, still cheap as chips!!

[Dennis, Cramlington Northumberland 13 Mar 2008 14:03:37]

Nice of our darling not to gently remind us of the removal of the 10% tax band announced last year, and very soon to take effect...

Can we not use all these accursed plastic bags to permanently place over the heads of most of the 'honourables'...I mean, most don't seem to notice what we, the people, are suffering

[David, Edinburgh 13 Mar 2008 11:52:05]

Just a cynical re-distribution of taxes to increase the Government's chances of re-election. It would be nice if all Government ministers were asked to make a contribution to the extra car, fuel and drink taxes that we all have to pay for them.

[L.Sykes-devon 13 Mar 2008 11:48:06]

The pensioners are going to be so better off with their £50 extra winter fuel allowance.THATS A LAUGH.before last winter gas and electricity prices went up by at least £50 so in fact,thenew allowance will only bring us up to last winters cost. So ,this next winter when fuel costs go up again we will actually be worse off. this has happened each year for the past 7 years since I retired,each year we become worse off than the year before. What a useless government.

[Alan - Essex 13 Mar 2008 11:35:28]

Does Mr. Darling and Mr. Brown really think that increasing the price of Beer, Spirits and Cider will stop the binge drinking youngster. Why don't they go out with the Police on the streets on a Friday and Saturday night and see for themselves the damage they are doing to our neighbourhoods and society in general by not controlling the licensing laws and punishing the drunks who take up valueable time and space in our hospitals.

[Purps, Chelmsford 13 Mar 2008 10:39:07]

Darling made a fatal error and one that will come back to haunt him.
The error was really a signal.
He should have said under the current economic circumstances and expected slowdown to give the BOE room for action, I have today written to the Governor of the Bank of England and increased temporariliy thetarget rate of inflation to 2.75% for the next two years returning to 2% in 2010
This would have given the MPC the room to lower rates to asist the market and more importantly taken the heat of the finances, as with an extra borrowing requirement of 20 billions UK interest rates will need to stay high to attract funds.

What he has done ois open the MPC up to more dithering as now they will stifle growth by keeping rates at 5.25% leading the UK into stagflation.I suspect the Governor will have to wright his letter when inflation breaks above 3% in Spetember. The 2% is a meaningless artificial target, we all know the real inflation rate is around 6%

[ellie wales 13 Mar 2008 09:49:20]

I think Mr. Darling should spend 4 weeks on an average persons wage: Try to pay the fuel charges,tax his car, the energy bills, feed and clothe children and the other meanial things us normal people do. i have 3 kids and so next year ill get £20 a week child ben for the oldest child - wow what about the other 2, do they cost me any less? So that means ill be about £10 a month better off. As for child tax credit, £50 a year more - now thats really going to help! (not). And to top it all he puts up the tax on family cars - well talk about give it one hand and take it in the other. Mr.darling u r a true Darling! Bring back Tony Blair atleast with him we didnt feel as though our country was being run by a circus act. What u seem to have missed is what the country relly needs - We need to get rid of the illegal immigrants NOW not 2moro, send them back and give them no money, u need to cut the tax that hard working people pay, raise the minimum wage, and get these lazy people that dont work back to work, U need to help mums that want to stay at home and bring up their kids atleast for the first 5 years, help to keep small schools open. U need to actually help us as oppose to thinking your helping us. All u pm's need to take a pay cut and have a rality pay, u think u know how normal people live - u dont! u dont understand! The sooner someone else takes over from u lot the better, cause lets be honest they cant do any worse. The way this country is going, if you keep putting money in silly places we r going to end up like these poor countries we see on the tv. I only hope im not here to see it, but dont forget you might not be, but your kids might. For god sake do something that helps - ask people what they want instead of assuming you know - when u dont. Ive never been one for politics i just glance now and again, but this last year im amazed! the circus just gets worse. Ive said it b4 and ill say it again - roll on the day a disc goes missing with all yours personnal details on it, i only hope ths sun newspaper gets a hold of it! Maybe then you will all start to wake up and pull your finger out.

[Robert, Scotland 13 Mar 2008 08:52:53]

This budget, like almost all produced during New Labour's 10 year reign is re-active not pro-active. It attempts damage limitation on continuing failure of Government policies.
This Government believes we are all very predictable and all it has to do is set us targets and we will conform, no respect for individuallity there then. This Targets stategy comes from the "Games Theory" refined by the Nash Solution. The Nash in this case being John Forbes Nash Jr,a Nobel prize winning Mathematician. The only thing is Mr Nash went public recently and admitted he got it wrong.
When you set Targets for people they will make it happen, although the end result can be very different from the desired goal.
The mismanaged GP's contract is a perfect example of setting the Target too low thus the Service costs much more for less delivery. Set the Target too high and people devise disengenuous ways to achieve them, like taking the wheels of hospital trolleys so they can be classified as beds.
It does not stop there threaten an organisation's budget if it fails to meet a Target and you can throw the statistical reports they give you out the window. The figures will be massaged to create a "mirage" of attainment that does'nt exist.
Does'nt that sound a bit like this Government's own report cards.

[mick,essex 13 Mar 2008 08:35:54]

i have never really bought into the whole global warming nonsence but i do my bit recycling not using plastic bags etc,but we all new from the start that the government saw this as an easy way of making money from hard working people.Needless to say us drivers are getting hammered again.Its about time all drivers in this country voted for a party which stops hitting the easy target (if only someone had the courage to stand up to the greenies).It is easy to be an 'environmentalist'when you don't have to work or you have a tube system outside your house to get you to work.There is something wrong in this country when a peadophile can get probation but drive a 4x4, look out!

[Dr E O Selim Basingstoke 13 Mar 2008 08:12:03]

Welcome to "The Zimbabwe Club"

[Dr E O Selim Basingstoke 13 Mar 2008 08:09:34]

More pressure on those who are just surviving.

The usual Party spin leading to more decline of Britain.

Next year, after Egypt get rid of its corrupt regime, Britain's debt will be much higher than Egypt's. More or less in the Zimbabwe league.

Viva Gordon's prudence.

[G,Bolton 13 Mar 2008 06:47:47]

Vote for me, we need to close our borders to stop immigration, anyone who wants to live over here must be able to provide for their family for 15yrs without any handouts.Petrol will be capped to reach no more than 90p a litre.School leavers who don't have a job after 1yr will be drafted into anyone of the armed forces or police force.Pensioners will pay nothing for fuel bills.These are the people(pensioners) who saved our country from invasion.Give power back to this country and not let any other country have a say on how WE run OUR country.
YOUR COUNTRY NEEDS YOU!!

[Terry London SE26 13 Mar 2008 03:34:59]

I totally agree with Andy from Leeds,the difference being that I am not married,though my partner and I are hammered by this Labour government with their taxes.
There methods are neolithic in addressing problems that prevail in this country. Instead of tackling the root cause they hit everyone. An example of this is the extortionate tax rise on alcohol. Do they really believe it's going to cure the problems of binge drinking, so common amongst the youth and younger children. I think not,these morons are more likely to go out and mug old ladies to fund to errant ways.
I think it is blatantly clear
as it always has been that if you are a state dependant scrounger vote Labour

[J bloggs 13 Mar 2008 00:49:14]

Im on my pension now but I still agree with a lot that is said about the people who work for a living. my son works God knows how many hours and they are crippling him with poll tax and water rates so people like him good honest people will never reap the benefits of thier labour.
While lazy idle bums with nothing wrong with them claiming sick and all that goes with it.Still work and claim nothing seems to be done about these people plus why are all our men going with this polish women who are only after a free lift into out country silly men bring them here and other people suffer for it the men who want to marry these women should be made to live IN THIER COUNTRY that would soon stop them , we cant look after our own so why should we look after these other people who got thier own country to go back to. our goverment is CRAP and that is all that can be said ,

[Angry English worker from Hastings 12 Mar 2008 22:53:06]

Im off to Canada in a few years, cant wait to get out.
even if the Conseratives get in next time it will take them 10 years to put it right and by then well all be sick of them and shiny new new labour will get in and muck it all up again. we are a country of numpties for not having a revolution and taking back what is ours.

[robert Hampshire 12 Mar 2008 22:22:48]

Brown and Darling are the Laurel and Hardy of our time. I will gladly pay 2p in tax to buy them each a plastic bag to put over their heads.
Taxation should be fair benefits should be paid to those who have earned them.
After woking hard and paying all my life, your not content with having raided our pension fund, you renage on promises we reluctactly agreed to and now you want to take my car away which is only used to pull our caravan.
We can afford to fly- tax that properly see how co2 you can save there.

[Andy Leeds 12 Mar 2008 20:47:58]

As always the Budget rewards the idle. If you are hardworking and particularly like my wife and I who have no kids and good honest jobs we get nothing but more taxes. Something ahs to be done about the cost of energy and petrol.

[Emma Coventry 12 Mar 2008 20:02:26]

I agree with the first comment whatever darling does he wont please everyone. I am happy to see the increase in child benefit and tax credits, and am pleased that the government plans to do more to get people off benefits and back into work which is my major issue with this country. I do wish that people would realise that we will always have to pay tax as our wages go up so will tax. deal with it!

[david sthelens 12 Mar 2008 19:37:48]

this budget was just like last year hit the working class were it hurts the non doms and big earners are the lucky ones too much of our taxes are going overseas we could save £26.5 million by not paying child benefit to the kids who live in poland that would go along way to help the nhs or for the many people who lost pensions when there companys went under i live with my wife and 3 year old son i have my own buisness and my wife works part time have our own house but yet we would be better off if we didnt work where is the logic behind that i will certanly be voting conservative yes maggie brought poll tax but she knew how to handle immigrants and europe

[Dave, Kent 12 Mar 2008 19:14:21]

Totaly agree with Keith, im sick of us working class paying for every thing in this country, the rich get richer and the dole bums, immigrants getting all the help and us people who have to work (British people) paying more & more to sort out the goverments problems, we should stop sorting out other people problems around the world and start looking closer to home. wars in other parts of the world which we dont have to get involved in, immigrants draining our NHS, schools and benefit systems. we spend £300,000,000 a year on immigrant problems, how many nurses schools repairs to our roads could this cover, im starting to think, sod it. sell up move overseas and see how long the doll bums, benefit cheats and immigrants can keep the country going without us working class. let the rich and there 1% tax rate pay for more instead of just taking the cream. im not a racist but am sick of hearing so many british people i know all working class get no help when they fall on hards times & need it after paying into the system for years but anyone can come to this country and get a house money phones every help possable, time for us working class to stand up and fight to change things? stop wasteing our taxs and stop being mary poppins to the rest of the world and start thinking of our selfs like plenty of other countries do.

[darren from carterton 12 Mar 2008 19:11:57]

the budget some good points and some bad, the good points are having to pay more on drink as a bus driver i see the affect drink can have first hand, paying more on fags is good hopefuly it will slow down young people smoking, bad points 2p more on fuel as if we dont pay enough on fuel, but it makes me laugh that the goverment put the price of fuel up for no reason yet they wont put money into hybrid cars to save global warming as they would lose alot of money from people not filling there cars up its if they want you to buy fuel guzzlers, the goverment moan about fuel guzzlers but its ok for them to be taken around in jags and stuff maybe one day they can practise what they preach.

[G, Bolton 12 Mar 2008 18:37:32]

Same old Labour over spent so they need to get the cash back.....and what they say about putting things up for the good of the environment, what crap they come out with...General Election can't come quick enough.....
Down with Labour...

[roger wales 12 Mar 2008 18:21:35]

the budget is anon starter it hits the little people again it is disgusting the way he has done it the well off have had agood deal he has dressed it up to make it look good for the less well off the pensioners have had a raw deal again and we had to pay again for goverment failure

[steve hope ,worcester 12 Mar 2008 17:54:04]

fiddling while rome burns sums this budget up.what a shambles,this government is making political decisions instead of tackling the issues with any real purpose. i'm with jeremy clarkson, you might as well close government down-their all useless.

[andrew ager, basildon 12 Mar 2008 17:43:06]

What a load of rubbish, just went to fill up my car with petrol 104.9 a litre? when will this come down. Child benefit up to £20 the first child whats that, a £1.90p rise? this will be eaten up in the cost of carrier bag's.
Full costs at record highs, Child poverty still apparent in the 4th largest econamy in the world. Who to blame, New labour, tony blair and his puppet Gorden Brown with their previous budgets over the last ten years and how long to fend of the inevitable recession. This is a joke, or should i say they are a joke.

[imclean maidstone 12 Mar 2008 17:28:19]

now 5 pubs a day will shut instead of 4 and do these idiots think people are buying their fags in the high street

[Edward London 12 Mar 2008 16:22:20]

Whatever the Mr Darling does with be viewed as a positive from one part and a negative from the other, its hard to please everyone at the same time. He has a tough time this year due to the state of the economy he has to pick out positives from a sea of negative news the added child benifit for the first child will be encouraging for low income familys but overall its hard to make clear defined assesment on this years budget because of the circumstances the man deserves a break for what he has to work within.

[Keith. Lemmington 12 Mar 2008 16:20:47]

more tax, less cash, more lies, same old New Labour. How on earth voted for this lot of incompetence idiots, you should be ashamed. This isn't a football team that you stick by through thick and thin, this is a Government that gets it wrong time and time again and has wasted billions of pounds

[Keith. Lemmington 12 Mar 2008 16:15:50]

more tax, less cash, more debt, less happiness, more lies, some old New Labour. Who on earth voted for this lot of incompetent fools. When is the next election, its time for the hardworking to have our say.