By Ray Fleming
l THERE are few things in British political life that cannot be seen as relevant to Mr Tony Blair's departure from No 10 Downing Street and Mr Gordon Brown's move there from next door. Thus the Chancellor's sudden discovery that the economic cycle which he has always said began in 1999 actually started two years earlier in 1997. He revealed that he was making this adjustment in the interests of historical accuracy during a meeting of the House of Commons Treasury Select Committee on Tuesday. Naturally, those who understand these things have questioned Mr Brown's real reason for the change. In 1998 he enunciated the golden rule by which he would run Britain's economy; this stipulated that the current budget should be in balance over the economic cycle as a whole, in other words that current spending should be paid for only out of tax revenue. Until quite recently the prudent Mr Brown has kept to his rule but, looking ahead, he can probably see that it will be increasingly difficult to do so until the end of the current economic cycle in 2006. Expenditure is rising and tax revenues seem likely to fall as the global economy fails to pick up speed. In such a situation there are normally only two solutions for a Chancellor: either cut expenditure or raise taxes. This is where Mr Brown's prime ministerial ambitions may come into the picture: he would not want his reputation as Britain's best Chancellor in modern times to be sullied by cuts in public services or increased taxes. Hence his concern for historical accuracy which has led him to predate by two years the start of the current economic cycle. By doing so he immediately adds about 10 billion pounds to his kitty from the first two years of Labour government during which he followed Conservative budget plans. That sum will conveniently cover the likely shortfall that would otherwise show in the near future.
We should always remember Mr Brown's observation that there are only two kinds of Chancellors, Those who fail and those who get out just in time.