At least Darling’s Budget will take our minds off the McBride scandal

This may be hard to believe, but many Labour MPs are actually looking forward to the Budget which will lay out in gory detail just how Britain is suffering from the worst public finances since World War Two.

Alistair Darling's 'Recession Budget' is being looked to as a welcome relief from the Damian McBride email scandal and the internal feuding threatening to do to the Labour government what the banking crisis has done to the global economy.

At least the economy is the territory on which the government has been expecting to fight the long pre-election campaign, depressing though it is.

Despite all the recent talk about the first signs of green shoots and the worst perhaps being over, this is going to be a grim Budget. Last year's Pre-Budget Report forecasts will be shown to have been wildly optimistic and when he stands up in the Commons on Wednesday the Chancellor will have virtually no room for manoeuvre, particularly after Bank of England Governor Mervyn King effectively ruled out the option of a further fiscal stimulus.

But Darling will have to give some clear idea of how he will start to rebalance the books in the future - and that will mean tax rises and spending restraint down the line.

There will likely be lots of tinkering around the edges - a car scrappage scheme, a £2bn package of help for the unemployed, green measures and perhaps some tax increases on big pensions. And it has now pretty much been confirmed there will be a £1bn package to boost housing.

The fact that the Treasury and ministers have abandoned the traditional pre-Budget purdah and confirmed some of these stories is another sign of how eager the government is to switch attention back onto the economy and away from other distractions.

But few believe there will be any surprises big enough to encourage headlines declaring 'An Election Winning Budget'.

However, Darling probably has one trick up his sleeve that could help Labour in that election. And it looks like a classic Gordon Brown-style trap for the Tories. As widely reported, it is expected the Chancellor will add another £10bn to the £5bn Whitehall efficiency savings - that's cuts to you and me - he has already planned for the next three-year period.

This is precisely the area the Tories are focusing on, in order to avoid tax rises where at all possible because of the natural animosity towards them from Tory grassroots and MPs.

But their room for manoeuvre will be severely restricted if Darling does it first. Labour will claim Darling's cuts will be met by efficiency savings on Whitehall bureaucracy, waste and so on, without impacting directly on core public services, and that there is now no room left to find any further savings in these areas.

So, Labour will argue, the Tories can only make further cuts by carving into health, education and other vital public services. And they will put increasing pressure on David Cameron and George Osborne to come clean on exactly where their axe will fall.

Once again, the old battle cry about 'Tory cuts' will be heard on the election campaign field.

THE MOLE: BUDGET

FIRST POSTED APRIL 21, 2009