And why not? Chancellors should be boring. If economics is about the slow increment, and being Chancellor is about keeping everything under control and hence predictable, then Gordon Brown could be said to be doing his job quite well.
The opposition came to the Commons expecting the blood of collapsing forecasts and gloomy predictions. They didn't get it. And the Chancellor has some justification in denying it to them. The economic climate has certainly taken a turn for the worse. But, pace Francis Maude, this government has public expenditure under better control than its predecessor. By giving up the right to set interest rates to the Bank of England, the Treasury has also ensured a monetary regime that is, if anything, too tight. The Chancellor has had to revise his previous forecasts, made last July. He may yet have to do it again before the budget in March.
He may be right in arguing that over the coming year the public finances can take a slower than predicted growth rate without a volte-face either to higher taxation or reductions in expenditure. But that is no cause for the complacency he showed yesterday. Given the fact that 40 per cent of the world economy is already in recession, and that a banking squeeze could easily push even America into reverse, his figures of resumed growth of about 2.5 per cent in 2000 and more than 3 per cent in 2001 are just so much pie in the sky.
Companies in the private sector have long since given up central forecasts. Instead they produce different scenarios and test their robustness against plans. It is time the Treasury did the same. Its record of forecasting has been abysmal in the past. Why expect better in the future? We are old enough to be given alternatives.
Micawber is not the best model for Chancellors when facing the future, and Brown has got himself in an unnecessarily tight corner over his forecasts, with an uncomfortably tight margin in the short term, and no margin at all in the longer term. Being boring, as Geoffrey Howe eventually discovered, is no excuse for becoming complacent.
It is in the spending announcements, too, that one begins to worry that the iron Chancellor may be more woolly than he appears on the surface. There is in Gordon Brown a hankering after intervention, an underlying feeling that government must act on the supply side if it is ever to improve the country's long-term performance. There are some good proposals, such as the reduction of the vehicle excise duty on small fuel-efficient cars and the plans for encouraging employees to buy shares in their own companies. The extra pounds 250m to help avert the usual winter crisis in the Health Service is to be applauded.
But the steady parade of announcements on training, research and development help, technological clusters, profit sharing, public sector productivity targets and small business assistance feel warm but in practice are likely to mean very little. Even if they did, Brown does not have the levers to effect them.
However the greatest gap of all was the absent guest at this feast: EMU. To talk of the future without discussing this makes no sense. If we were founder members of EMU now, our interest rates would have to be far lower than they are today. But we are not, and we will remain prey to currency speculations that continue to make the lives of our manufacturers hell.Reuse content