Hard act to follow

ROLL up! Roll up! Marvel at the world’s greatest funambulist as he tries to balance enormous debts with City confidence. Be astounded as he makes deep and savage public spending cuts while continuing with public service investment. Be amazed as he tries to raise vast amounts of money without crushing the tiny and precious green shoots of recovery.

Thrill and gasp with amazement as he taxes the rich just before the next General Election.

Never before has a Chancellor of the Exchequer had to perform such a delicate balancing act as Alastair Darling yesterday. He attempted to perfect the art of tightrope-walking and so become a master of the art.

He looked surprisingly cheery as he made his attempt at the Despatch Box, even though he knew the black hole beneath was unimaginably large. He said Britain will have to borrow £175bn this year, although his Budget book said the country was going to try to raise £220bn through the sale of gilts and bonds.

Knowing that announcing the size of borrowing in years ahead was a going to be difficult piece of funambulism, Mr Darling rushed through the figures.

David Cameron pulled him back, and slowly pointed out that he had said Britain would borrow £606bn – that’s £606,000,000,000 in full – in the next four years.

The City got the collywobbles, with the pound dropping, as the Chancellor walked across his thin rope above a deep and dark abyss.

Still he looked hugely optimistic he could pull his attempt off. Unbelievably optimistic, in fact.

There are some early signs of economic improvement in the real world, but this is largely because things have stopped plumetting so precipitously. Mr Darling, though, believes the economy will be bouncing back by the end of this year, that next year will see 1.25 per cent growth – most other economists reckon a more modest 0.3 per cent growth.

IF that’s not optimistic enough, Mr Darling predicts a stupendous 3.5 per cent growth in 2011. This is such a rapid bounce back that David Cameron called it a “trampoline recovery”.

Of course, Mr Darling – who 13 months ago predicted we’d borrow a mere £38bn this year – needs to fix the figures so that they show enormous growth tomorrow, as it will mean that his tax take will be so high that today’s debt will be paid back quickly.

Mr Darling was also extraordinarily optimistic that he can find money from the public purse to throw into that pot marked “pay back”.

He said: “You can grow your way out of recession.

You cannot cut your way out of it.”

Then he announced £15bn of cuts – sorry, in this new post-spin age, we no longer talk of cuts but of “efficiency savings”.

He seemed to believe that such sums could be saved without taking the axe to public services or projects. There’s no need to cut something important like Identity Cards and save £5bn when the Chancellor optimistically believes he can save £15bn by picking up paperclips from the carpet and sending all letters second class.

He even said: “We will protect investment in schools, hospitals and other key public services.”

Then the NHS announced that its revenue budget for 2010-11 is to be cut from £104.6bn to £102.3bn.

Yet, despite the wobbling on the tightrope caused by the black hole and the impending cuts, Mr Darling never looked likely to topple headlong, largely because he made so few expansive gestures.

His pledge to cut Britain’s carbon emissions by 34 per cent by 2020 did initially look rather rash, particularly as he said it was a “legally binding” figure. However, there are no carbon police to enforce it.

He made welcome and worthwhile investments in carbon capture and offshore wind – sectors that the North-East needs to make its own – but stopped from wobbling too far on the green side by announcing investment in North Sea oil and gas.

Indeed, rather than spend money creating a network of roadside powerpoints for when we all get electric cars, Mr Darling preferred to reinvigorate the petrol car market with the “scrappage scheme”.

Andrew Simms, policy director of the New Economics Foundation, concluded: “You could say this is a balanced Budget in the sense that any positive environmental action is likely to be cancelled out by the Government locking-in a fossil fuel intensive infrastructure.”

Even when it came to taxation, Mr Darling maintained his equilibrium. Despite the vast debt, the big four taxes – VAT, income tax, National Insurance and corporation tax – went untouched by the Chancellor.

He made a few waves with his attempts to soak the rich, but there will be even fewer tears shed among the three-and-a-quarter million unemployed when the 291,000 people who earn more than £150,000-a-year receive their increased tax bills next April. Indeed, Labour claimed yesterday that these high earners each receive £27,000-a-year in tax breaks – £8,000 more than the average salary in the North-East – so there might even be an outbreak of moral indignation among the public as there was when Sir Fred the Shred’s pension leaked out.

It is possible that the funambulist may even have performed a conjuring trick on his tightrope, because he appears to have magicked up an electoral quandary for the Conservative opposition. Will the Tories really go to the polls next May demanding a tax cut for a few, wealthy individuals?

Mere mention of the election means that Mr Darling completed his tightrope walk yesterday without over-balancing.

He did it by avoiding creating any wobbles: this was, in truth, a Budget that was modest in terms of fiscal stimulus, of job creation, of saving the environment, of rationalising public expenditure and of raising revenue.

In its favour, it is unlikely to damage the current tiny flickerings of economic recovery, but, equally, it will not address the future enormity of pay-back time.

Whoever picks up Mr Darling’s balancing pole after the next election will discover there’s not much fun being a funambulist and this Budget may look to have been an exceedingly dangerous high wire act.