The best thing you could say about today's Budget speech from Chancellor Darling is that at least George Osborne wasn't delivering it.
New Labour has attempted to distance itself from Tory plans to immediately begin cutting public spending if they win the next election. They have even provided a tiny amount of stimulus to the economy to offset some of the worst effects of the recession. But these measures are pathetically small by international standards - any smaller and they wouldn't have registered at all.
But the really bad news is still to come. Over the next 5 years today's Budget plans to reduce public spending by one quarter compared to the expected growth in the economy. That means as our classrooms and hospital needs grow, New Labour intends to provide 25% less of the spending for those real needs. Disastrously, when the economy is already reeling from a collapse in investment, it also intends to reduce its own investment by over £10bn this year.
The strangest thing of all is that the Budget shows that stimulus works. The limited measures taken previously such as the VAT cut had the effect of boosting the economy and the tax revenues. The government deficit actually came in nearly £10bn lower than forecast. And the the interest rate paid to the financial markets was also lower than forecast- so much for the foolish idea that cuts are needed to 'reassure the markets'.
But look what is happening to that windfall. Just £200mn of it is going to prop up the economy, the rest is going to pay down debt. This is a windfall that could have been used to really get the economy going again and people back to work, spending and paying taxes. Instead, it's a windfall for the bond market. What a waste.