The harsh Winter of 2009

This coming Wednesday the Chancellor, Alistair Darling, will stand up in the House of Commons and deliver the pre-Budget Report. The economic background this time makes this the most important hour of his political life. The appalling state of the Nation's finances argues for a series of tough measures with savage cuts in public spending and sharp hikes in all forms of taxation. However, the anaemic condition of the "economic recovery" suggests that we need the very opposite with some further fiscal stimulus providing a boost to the economy. And finally, we have the political factor with the Labour Government facing an election in the 1st half of 2010 which few commentators believe they can win. Against this background what will he do? Well we can expect some tax rises especially for the wealthy and high earners. Indeed we have a 50p top rate of income already coming for those earning over £150,000 per year. There will be few tears shed for the premiership stars and the bonus-laden bankers who get hit by this move. We should also expect to see some significant cuts in the public spending with many more coming in the next few years. If the private sector has borne the brunt of the recession so far it will soon be those working in the public sector who will be feeling the pain. Any money he has to spend will be focused on trying to give the young some renewed hope in the labour market. These are tough times and if it is raining and cold on Wednesday morning you might be better off hibernating for the Winter before emerging back into the warmth of the early Spring. This looks set to be a long and very hard Winter which in coming years we might all care to forget. So it is over to you Alistair good luck!