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Monday, June 21, 2010

Has the budget happened yet?

It is said that anticipation is nine tenths of the pleasure but in terms of tomorrow's budget it seems all that is being accomplished is that we are prolonging the agony. This is the longest day and already it seems like a year, yet it has barely started.

The papers have been full of dire warnings for weeks about the consequences of George Osborne's debut performance, without having any idea at all about what he will say and do.

People have been throwing up horror stories and then treating them as fact so that they can knock them down again. We even have politicians on the Government side pledging to rebel on certain measures that people think will be in there but do not yet know for certain that they will feature at all.

In this morning's Western Mail, Professor Hugh Pennington quite rightly argues that food hygiene should remain a priority, however already we can see the difficulty as in Wales this area of expenditure is twice removed from the budget process.

Public protection is a non-hypothocated area of expenditure, which is the responsibility of local government. Their financial future depends on the grant they get from the Welsh Government, who are in turn dependent on the Barnett consequentials of the UK Government's spending decisions. It does not get more complicated than that but then that is democracy and do we really want to change it? That was a hypothetical question by the way.

In the case of Hugh Pennington's concerns there are of course statutory responsibilities involved and the opportunity for the Welsh Government to top up resources with a direct grant or to strengthen regulations but I think you see the dilemma. There are just so many priorities and so little money.

And then there are the implications of a budget that has not yet happened in terms of macro economic policy. The jury is out on this of course but we should bear in mind that the UK economy does not sit in spendid isolation. Pressures on Greece and Spain show that we are subject to international market conditions and that confidence is key in terms of Britain's credit ratings on which depends the country's solvency.

Actually there is no consensus on what needs to be done but my piece of advice for what it is worth is that although many people accept the need for drastic measures to get the inherited deficit under control the Chancellor needs to note their concerns and wield the tools at his disposal with fairness, protecting the weakest in our society, and with some care. I think and hope that the presence of Liberal Democrats in government will ensure that this happens.
Im wondering how much influence Clegg has? Sheffield has many public sector workers, if theres thousands of job losses in the public sector, this will harm his chances of getting elected again, as most will vote Labour instead.

Also Swansea has thousands of public sector workers, job losses will have a depressing impact on Swansea and South West Wales.

I hope the Lib Dems will apply common sence and moderate the Tories, otherwise they could end up like the Liberal Party was in the 50s, with very few MPs and no influence.
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