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Wednesday, 24 March 2010

Cuts and the Fag End Parliament

Budget Day today and Parliament certainly had the feel of the end of the Parliamentary Session about it. A definite farewell appearance from Darling at the steps of Number 11. And PMQs had the feel of both Cameron and Brown rattling through the arguments as though they can't wait to hit the campaign trail proper. This close to an election, the moment when the power is handed away from Parliament to the people, knockabout in the Commons almost feels irrelevant. It's time to go to the country.

An unnecessary budget today - some important political positioning and some positive news for the Chancellor to tell on the deficit. Today provided him with the opportunity to present the deficit as coming under control, with a cut of £13bn next year. A further announcement today of £11bn of cuts, with individual departments coming up with their cuts contributing to the £11bn. You look at the detail however, and can't help wondering why these savings haven't been found before. Take the Ministry of Justice - savings of £25m on consultancy and procurement and £5m in savings by cutting the Senior Civil Service by 20%. These aren't really cuts, they are the kind of efficiencies that any responsible government department should deliver as a matter of course. Labour's weakness in the cuts now or cuts later debate is that their record on waste is fairly dismal.

So, we have had today more detail from the Government on where its cuts will fall. And a pledge to reduce the deficit by more than half over 4 years. Will we see similar detail from the Tories and Lib Dems? A trickier one for the Tories to handle - they don't want to fall into the trap of being portrayed as willing to cut frontline services, but don't have access to the books to identify and cut the peripheral waste that is contributing to the deficit. That said, the key cause of the deficit was the banking bail-out: it has driven up the deficit to such a level that the Tories can lump in wasteful public spending in a way that would have been too "nasty party" for them two years ago. They had barely mentioned cuts in the Cameron years prior to the meltdown. The City's failings allowed them to go after their core vote-winner of public sector cuts.

PREDICTION: Still sticking with a CONSERVATIVE MAJORITY OF 20

William Hill now predicting Conservative majority of 11 - 14. Polls continue to narrow - 5 to 7 points the agreed average. Lib Dems doing very well at 19 - 20, surely due to rise a couple of points if Clegg gets through the debates OK. We need to see a marginal poll to get a better idea of the current projection. Certainly it seems that LobbyGate, Sam Cam's pregnancy and other extraneous issues just don't affect the poll rating. It will take something major to shift the polls from this 7 point average. But this is still very much Phoney War territory - there are sure to be dramatic changes in the polls as the campaign gets going... my hunch is they will continue to narrow. Labour full of surprises.

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