The City of London had talked itself into believing that Gordon Brown would duck the problems by producing a broadly neutral budget, accepting a wide public sector funding gap but indicating that borrowing was the right course to pursue during a war. Some also expected him to kick the euro into touch for the next few years. Some analysts thought that the Bank of England's Monetary Policy Committee would cut interest rates the day after the Budget. The general feeling was that Prudence's halo had slipped, that his relations with the prime minister were poor and that he might be approaching the end of his six-year occupancy of Number 11, Downing Street.
Well, the analysts were right and wrong. The chancellor defended his borrowing strategy and contrasted it favourably with other countries. He predicted that Britain's growth rate in 2003 would be between 2% and 2.5%, double that of euroland and Japan, much better than Germany (0.5%) and about the same as the USA. His Budget was generally well received by the Labour Party, but was buried as a news item by the collapse of the Saddam regime in Iraq that very day.
As for joining the euro, there was no Budget announcement, but it was widely expected that the decision would come very shortly. When it does, it will be "no", or rather "not now", but that was always Brown's instinctive feeling. If Tony Blair wants the Treasury to back British membership of the euro, he had better make himself chancellor of the exchequer. There is no other serious pro-euro candidate in the Cabinet.
It was gaily left to the other Cabinet ministers to explain how these initiatives would work
More interesting than the fiscal decisions, which were all fairly routine, was the chancellor's involvement in matters that were not obviously within his remit. It was surprising that he used the Budget speech to announce a shake-up of the town planning procedures and an enquiry by a former top official of the CBI into how barriers to increased housing supply could be removed. These were surely the responsibility of deputy prime minister John Prescott, who could have made the announcement himself. Initiatives were also launched by Brown into the role and powers of job centres and how to train up the 8 million adults who do not have NVQ2 qualifications.
The House of Commons was told that home secretary David Blunkett would substantially increase the number of work permits for skilled migrants, with "industries, such as construction, that face skills shortages" getting special mention. It was gaily left to the other Cabinet ministers to explain how these initiatives – which they would dearly have liked to have trailed personally – would work in practice. In particular, it will be important to ensure that the skilled overseas migrants coming into construction have a good enough grasp of English to be able to understand site safety induction procedures. This is a vital safety requirement that requires strong government backing.