Today, the Chancellor delivered his emergency budget.
Some people have questioned whether we needed an emergency budget so before I go on to say what I think of what the Chancellor had to say it's worth explaining why I think he was right to have one.
In the financial year 2009/10, the UK had the second largest budget deficit (the amount the government spends minus the amount it raises) of any of the country in the developed world. Nearly £1 in every £4 the government spent was being funded by borrowing. The previous government planned to halve borrowing over the next five years - in other words, we would still have been borrowing huge sums of money in 2014/15. In the light of what has happened in Greece, it is clear that there was a real risk that the financial markets would have lost confidence in our ability to pay back all this debt. Painful as it will be, we need to reduce borrowing quicker than they planned. Of course there is a risk that taking action while the recovery is still weak will damage growth but the risk of the financial markets losing confidence - and the damage that would do in terms of higher interest rates - is greater.
So what did I think of what the Chancellor had to say?
Well, first of all he deserves credit for being much more honest about his policies than Gordon Brown ever was. Don't take my word for it - Robert Chote, the director of the independent (and excellent) Institute for Fiscal Studies, told journalists at the IFS's budget briefing that "the government is certainly to be congratulated for the transparency with which it presented [yesterday's policy announcements]." And he also deserves credit for setting up an independent Office for Budget Responsibility to produce the economic forecasts that are published alongside the budget (in the past, these forecasts have been published by politicians who often have an agenda - for example, we now know that Alistair Darling's forecasts in his last budget four months ago significantly over-estimated how much the economy would grow over the next few years to make things look more rosy than they are in the run-up to the election).
Second, I think he got the balance between spending cuts and tax rises - just under £4 of the former for every £1 of the latter - about right. A report by Goldman Sachs, published on 14th April, which reviewed every major fiscal correction in the developed world since 1975, found that decisive budgetary adjustments that have focused on reducing government expenditure have been successful in dealing with deficits and typically boosted growth, whereas adjustments that have focused on increasing income by raising taxes have typically failed to deal with deficits and damaged growth.
Third, while I was pleased to see him protect the NHS budget, some of the cuts in other budgets are going to be significant - more than 25 per cent potentially in some cases. Lots of people in Croydon Central work in the public sector so that is a real cause for concern. The Chancellor said he would try to make savings in the welfare budget to reduce the pressure on departmental budgets and I will be holding him to that.
Fouth, amidst the pain there was some good news on tax - the increase in the income tax threshold will take nearly a million people on low incomes out of income tax altogether, the offer to help efficient councils freeze Council Tax is great news (I know Croydon Council will take it up) and it was good to see that he has listened to the representations I and others made re Capital Gains Tax.
Finally, although there's no getting away from the fact that we are all going to be worse off, taken together it is a fair package with those who earn the most facing the biggest impact.
Harriet Harman, responding for Labour, tried to pretend that we were doing this not because we have to but because we like cutting public services (which is ludicrous: the NHS saved my life when I had lymphatic cancer as a kid, I have two kids at a state school and I am campaigning for more police on the streets of Croydon - why would I want to cut public services?) and made no apology for the mistakes Labour made that have got us all into this mess (quite a bit of the deficit is the result of the global recession, for which they are not to blame, but the rest is the result of their mismanagement of the public finances - for years before the recession, they were spending more than they were raising in tax).
All in all then, a tough Budget but a fair and necessary one. I had a chance to make many of these points when I spoke in the Budget debate this afternoon.
Apologies for such a long post but I suspect this Budget will prove to be the defining political event in this Parliament.