Letter: A Budget that ends consumerism

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The Independent Online
Sir: It would have been too much to have expected the Chancellor in his Budget speech to apologise to the nation for the 10 quarters of falling manufacturing output, for the pounds 12bn current account deficit rising to pounds 17.5bn in the coming year, and for the prospect of a borrowing requirement for 1993-94 of pounds 50bn. Nor did the Chancellor express any regret that, so soon after the election, the Government had broken its promise not to extend the scope of VAT or raise the level of National Insurance contribution.

However, given that the economy is not yet on a firm recovery path, it was sensible of the Chancellor to introduce a broadly neutral Budget this year. It was also a good idea to commit the Government in advance to raising revenue in the following two years, in order to reduce the vast budget deficit.

My criticism of the Chancellor's Budget is not so much of his overall strategy but of his failure to pay more than lip service to reducing unemployment or increasing investment in infrastructure projects. By his own admission, his jobs package will help only one in 10 of the long-term unemployed, while his announcement on private investment in rail projects sounded half-hearted. What about the pounds 5bn in capital receipts, which the local authorities could quickly spend on housing and other useful programmes? And as Holly Sutherland pointed out (17 March), the Budget measures will hit the poorest hardest.

If the strategy of delaying the biggest tax increases until the economy has recovered is going to work, it will depend crucially on the prestige and authority of the Chancellor. The problem with Mr Lamont is that he has lost his credibility. It would be far better if the 'Augustinian' policy of putting off the pain was carried out by a new Chancellor.

Yours etc,

GILES RADICE

MP for Durham North (Lab)

House of Commons

London, SW1

17 March

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