Budget should be balanced by now

So far Ken Clarke's crossed fingers are doing the trick. Hopes that everything in the economy will be rosy in the run-up to the election have so far been fulfilled. Growth has been steady, inflation low if a bit disappointing. On Monday the Governor of the Bank of England admitted the strong pound had made the need for higher interest rates less pressing, although he thought it remained. This concession was followed by yesterday's news of a surprisingly big repayment of government debt last month.

Let us give the Chancellor some credit. Government borrowing could have been in much worse shape than it is. Since Mr Clarke stepped in to the chaos left after Norman Lamont's tenure, he has achieved wonders in terms of slowing growth in government spending and reducing expectations about future public expenditure. If he had not been unlucky with the missing VAT millions last financial year, the public finances would be in better shape still.

But this should not deflect attention from the fact that, after five years of economic recovery, the Government should have made the Budget at least balance. After all, Nigel Lawson managed to run a surplus for three years. If tax revenues are not going to catch up with spending this year and next, they never will - or at least not without some drastic surgery.

This message will prove all too easy for politicians - of either party - to ignore during the next year or so. As long as the economy turns out to be as strong as predicted, buoyant tax revenues will help put government borrowing on an impressive downward path.

But the fact remains that Mr Clarke should not have squandered the budgetary benefits of the big tax increases pushed through after the 1992 election. If he had not bowed to the pressure to offer a discreet bribe to voters in the 18 months before the last possible election date, Britain's public finances really would be something to boast about.