Budget 2010 analysis: More policy, less posturing

Producing any budget – all those projections, tax-and-spending for years ahead, and more supplements than a bodybuilder's diet – ties up Treasury officials for months. Fiddling with forecasting models, constructing tax policies, co-ordinating departments – and changing the sums after another row with No 10. Yet yesterday's 228-page budget comes just 15 weeks after December's pre-budget report (PBR), and if the Tories win the election there will be another "emergency" budget within 50 days. Whoever is in power will have to set out a spending review by October, imposing painful expenditure limits for each department for the next three years. And then it will be time for another pre-budget report. That makes five major budget announcements over 12 months – usually there are only two. This means five doorstopping Treasury books – and enough tables to fill Ikea. Do we need them? Of course not. It is a clash between economics and politics. An entire economy is rarely changed much by a single event; the two major recent exceptions to that rule – the Exchange Rate Mechanism crisis and the collapse of Lehman Brothers – are 16 years apart. Politicians, on the other hand, are myopically focused on events. It's easy to spot the two political performances masquerading as fiscal: yesterday's budget from Alistair Darling, and George Osborne's emergency Red Book (as the budget report is known). The outlook has not changed that much since the PBR and it's unlikely to change dramatically before any announcement Osborne might make in early summer. Yesterday gave Labour a chance to make some electoral weather of its own before the polls and Osborne wants to look decisive in cleaning up the mess supposedly left by Gordon Brown. This isn't a technocratic argument. All issues to do with how the economy is managed, and how tax is raised and spent, are political. But to concertina chancellor's statements like this is both undemocratic and inimical to good policy-making. How much time will MPs on the Treasury select committee have to take evidence on yesterday's budget before parliament is dissolved? How much scrutiny will it get outside the Commons before the campaign begins? This election year may be an exception but the normal autumn PBR and spring budget is not conducive to good policy either. As chancellor, Brown launched the PBR ostensibly to consult on new proposals. In 1997, a Guardian leader commended the idea: "For far too long the contents of budgets have been kept to a narrow clique of people, not even including the whole cabinet, who then unleash policies to the world without considering the unexpected consequences." But it also noted: "Brown's initiative was much less of a consultative exercise and much more of a mini-budget than he claimed." Spot on. Rather than a testing of the waters, the PBR became another chance for grandstanding. There has been the odd PBR that deserved supersizing, though. After 2008's banking meltdown, Darling's stimulus measures made the autumn statement into a far bigger deal than many a full budget. If the chancellor consulted on reforms every two or three months, it might be better than these fiscal cloudbursts. Carl Emmerson, of the Institute for Fiscal Studies, believes it might make for more effective policy. There would be less political drama but it would be no bad thing if some of the drama was taken out of economic policy. And the Treasury officials would welcome a breather.