BudgetWatch - an 'unavoidable' budget to rebalance the British economy

And so the much vaunted Emergency Budget has been delivered...

Working on the premise that the Con-Lib coalition government is currently in a position of maximum authority - and expecting darker days ahead - Chancellor George Osborne, Chief Secretary to the Treasury Danny Alexander, and their masters David Cameron and Nick Clegg, have nailed their colours firmly to the mast of austerity today, with possible sunshine tomorrow (or, rather, in about three years' time).

This budget cuts deeper and faster than anything I can remember in my life time (admittedly, I'm not that old!); and the Con-Libs are betting the electoral house on the fact that the measures will work relatively quickly, cutting out waste and spurring on growth. And that there may be something to give back to voters - by way of tax cuts and spending increases - a year or two before the next general election, pencilled in for May 2015. For more on the budget measures, please see the B2L Public Affairs briefing paper...

Politics of the budget

The politics of all this is fascinating. Labour, currently led by a feisty Harriet Harman (soon to be succeeded by a new leader in September this year), will seek to exploit the discomfort of Lib Dem MPs - both front and back bench - who frankly never signed up for such public sector cuts and drastic, 'unprogressive', tax rises. Harman et al will be looking to drive a wedge between the Lib Dem leadership and its MPs as a way of weakening the coalition. The Conservatives meanwhile will support the tough measures - Conservative governments are used to putting up VAT upon assuming power - though there will be unease about some of the movement on increased Capital Gains Tax. However, Chancellor Osborne and his team have probably done just about enough to appease the John Redwoods of the party in settling for a lower rate than was expected.

And so on to the next political milestones: the autumn party conferences, and then that Comprehensive Spending Review on 10 October, when we will find out just how the 25% cuts in government departmental budgets will fall (save Health and International Development, which are both ring-fenced). Taken together with the forthcoming Labour leadership hustings/election in September, it certainly is an interesting time for anyone with an interest in UK politics...

CoalitionWatch - What does David Laws resignation mean for the coalition?

So David Laws becomes the first Ministerial casualty of the Con-Lib coalition government. What does this mean for the coalition?

Well... in the short term, nothing really. Longer term though, there may be implications about Cabinet management which the coalition leaders and their teams need to consider.


Regarding the short-term, David Laws' role as Chief Secretary to the Treasury means that to all intents and purposes he played second fiddle to the Chancellor of the Exchequer George Osborne; and so his resigning from that position causes no particular crisis either in the Treasury specifically or the government more generally.

We should remind ourselves that the position of Chief Secretary is regarded as a relatively minor one in the Cabinet, and that very few people remember the work of good or bad ones. For example, do you remember the public spending achievements of former Chief Secretaries William Waldegrave and Des Browne in, respectively, the mid 1990s and mid 2000s? Yet if I asked whether you recall their Treasury bosses, Chancellors Ken Clarke and Gordon Brown, I'm pretty certain that not only would you have some idea what they achieved in their time in office but that at the time you held them - and not their Chief Secretary underlings - responsible for UK economic success.

Don't believe all the commentary you may have read that somehow the Chief Secretary is this all-important mythical figure which the Great British public will throw tomatoes at when impending spending cuts start to bite. The Chief Secretary is a significant role for sure, but it is simply one amongst a wider Treasury team - if things go well, it will be George Osborne and coalition leaders David Cameron and Nick Clegg that will get the credit; and if things go badly, it will be the same three that will get the blame.

So Laws' newly appointed replacement, Danny Alexander, can sleep soundly in the knowledge he won't be held solely responsible for the public spending cuts and the success or otherwise of UK plc!


Welcome to B2L PoliticsWatch!

Welcome to B2L PoliticsWatch, a regular look at the political issues dominating the new post election world.

As readers will know, now is a fascinating time for anyone with an interest in British public affairs. To highlight just a few issues dominating the world of politics and policy-making...