Howard's Way.... a weekly column from the Rt. Hon. Michael Howard QC. MP. 

23 April 2009

The Budget is one of the great occasions of the Parliamentary year. The Chamber is full, expectations run high and there is real tension in the air.

It is one of the greatest challenges for the Leader of the Opposition who has to reply to the Budget speech immediately the Chancellor sits down. He is given no advance indication of what the Budget contains – apart from the leaks which have become such a feature of Budgets in recent years – yet is expected to provide an informed and convincing response.

Quite often, though, the theatre is misleading. The Budget itself will be of little consequence. Nothing much will change.

That is unlikely to be the case this year. Of course by the time you read this you will know what the Budget contains. I am writing a few days in advance of the event itself.

Yet it is clear that this year’s Budget will matter enormously.

We all know that our economy is in deep trouble. The forecasts made by the Chancellor of the Exchequer in his Pre-Budget Report just a few short months ago are now universally regarded as having been far too optimistic. They will have to be downgraded.

The numbers, particularly those relating to Government borrowing, will be so large as to be quite meaningless to most people. But I’m afraid the reality behind the figures will be full of meaning and impact on all of us.

Perhaps the main challenge facing the Government is the difficulty of maintaining the credit it needs to continue to be able to borrow in international markets while not taking any action that would damage the prospects of economic recovery.

It will not be easy. Yet, whatever our views on the causes and responsibility of the crisis we face, and I have made mine clear, we must all hope he succeeds. Even if he does, the debt which we leave to future generations will be enormous. It is, I fear, not a happy prospect.