Darling’s Budget may be delayed in hope that ‘something will turn up’
Tuesday, February 10: Chancellor Alistair Darling is dropping hints around the Treasury that his boss Gordon Brown has told him to delay the Spring Budget until April - after the start of the financial year.
Whenever the Budget is presented, it will reveal a nightmare combination of soaring costs for unemployment benefit and falling receipts from a collapse in corporate taxes as more businesses go to the wall. Darling's hopes of returning to growth by the end of the year have been blown apart by the economic crisis. Like Micawber, Darling is hoping that "something will turn up" if he delays for a month.
At the same time, Cabinet ministers are also asking for more money for the NHS, schools and transport - they want to know why they can't have more for their spending programmes when bankers appear to be able to get billions to bail them out.
Lord Mandelson has also opened a bidding war - which Darling is certain to lose, knowing Mandy's methods - for more money to be pumped into the statutory redundancy scheme.
This allows that anyone made redundant after two years' service is entitled to a minimum of one week's pay per year served and that if the company has gone belly up, the government pays the bill. Currently there is a £330 cap on the weekly salary, yet figures show that more than half the working population earn more than this, with mean pay standing at £452 a week. The TUC is urging that the weekly cap be reset at £500.
With so many UK companies facing bankruptcy, Mandy appears to be backing a higher cap and better guarantees for the scheme. Darling is fighting the bid, saying he hasn't got the money, but Mandy knows Brown will back him against his Chancellor.
A Budget delay would also enable Darling to indulge in some creative accounting: he needs to at least offer some of us an incentive amid all the gloom. He has already told Cabinet colleagues that he will do something for the pensioners who are complaining that the cuts in interest rates have slashed their income savings. And he will doubtless play up the tax cuts for those on the 20p-in-the-£ basic rate, already planned to come into effect from April.
Brown meanwhile has his eye on another date in the calendar - June 4, Election Thursday. The Government has moved the date of the local elections scheduled for May 7 to June 4 - the same day as the European parliament elections - in order to maximise Labour turnout. An unexpectedly good result would be the boost Brown needs to defy his critics, and plan for the general election, either later this year, or early 2010.
THE MOLE: BUDGET
FIRST POSTED FEBRUARY 10, 2009
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