Buying Time

The image that kept occurring to me as I read through the details of the budget was of an Indiana Jones style adventurer stuck in a booby-trapped cave with the walls closing in.

Yesterday’s announcements were the equivalent of slowing down the mechanism using a strategically placed rock. Imminent death is averted but only for so long.

None of the announcements were unexpected. The obviously unaffordable pre-election tax cuts were always going to be reversed. The fiscal rules were always going to be amended to allow more borrowing. Spending was always going to rise by a lot more than any party wanted to admit pre-election. This is why I’ve been so angry about the sheer dishonesty of the projections made by the last government, in the full knowledge of how many things were on fire across multiple departments.

What’s alarming is how little time the government have bought themselves despite these substantial, if inevitable, reversals. Rachel Reeves put a brave face on things in the Commons but she must be well aware how fraught the position is.

Rather than focus on the headline announcements, which are well covered in the newspapers, I’m going to take a longer term look at why things are looking so dicey, starting with spending projections and then looking at some key aspects of the OBR’s economic forecasts, before concluding with an assessment of the government’s possible escape routes from the cave of doom.

(All figures taken from the OBR report unless stated otherwise.)