George Osborne is being described as Admiral Jellicoe was, by Churchill before the Battle of Jutland in 1916: “The only commander capable of losing the war in a single afternoon.” This lunchtime’s Budget is widely seen as the defining event of the whole Parliament, which will determine the fate of the coalition.
Such a build-up is both necessary and misleading: necessary to persuade voters that the deficit and levels of debt are so high that tough action must be taken now, and misleading because today’s Budget is not the last word. It is one chapter in a long saga.
Mr Osborne will announce the overall spending totals for the next four years and big increases in taxes. But the details of the spending cuts will come later, in the autumn. And there will be many more Budgets to come.
The stakes are obviously high, both economically and politically. What does getting it right mean? Voters have to be persuaded that the pain is fairly distributed, and that core services such as health and schools are being protected.
If Mr Osborne gets it wrong, and sounds too gloomy, then business and consumer confidence could decline, with a serious risk of a slide back into recession, or a flat economy at best. The weakness of European economies has further depressed the outlook for growth.
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The consequent electoral unpopularity could put a severe strain on the cohesion of the coalition — not immediately but in a year or two. Meanwhile, Labour, under a new leader, will claim to be vindicated in battling against doctrinaire coalition cutters.
Timing is the key. The Tories always planned on announcing the tough measures now. Mr Osborne hopes that by getting the deficit down quickly, there will be scope for tax cuts towards the end of a five-year fixed-term Parliament (so watch the fiscal projections for 2014-15 in the Red Book). That is why David Cameron wants to tie Nick Clegg and his party into the coalition for as long as possible.