Wednesday’s Budget requires two big judgement calls from Gordon Brown and Alistair Darling: first, should they announce another short-term fiscal stimulus package to help boost the economy, and; second, should they announce another long-term fiscal tightening to help repair the public finances?

Mervyn King’s public opposition increases the risks associated with any additional big stimulus package. But bear in mind that the last stimulus package and any plausible repeat performance will make only a small contribution to the rise in public sector indebtedness that we will see in any event over the next few years, thanks to lost potential in the economy.

Much more important is the credibility of the plan to restore the public finances to health once the economy has stabilised. And not just the Government’s plan – if investors believe the opinion polls, their decisions whether to invest in gilts and other UK assets may depend more and more on their view of the Conservatives’ credibility and on the possible implications of a hung parliament.

We will be passing our slide rule over the Budget numbers and reporting our findings at a briefing on Thursday, with the presentations posted here on our website. We have already published a note giving an illustrative update of our Green Budget forecasts to help set the scene. Today we also assessed what revenue the Government can expect to raise from the income tax increases on the rich that it announced in last November’s Pre-Budget Report.

Educational Policy in the 21st Century

Every other year, IFS holds a one-and-a-half-day residential conference that brings together leading academics, policymakers and practitioners to share their perspectives on an important area of public policy. Our 2009 conference took place last week, 2 - 3 April. The conference addressed three key policy challenges:

• Schools: How can school quality and performance be improved?
• Adult skills: Are effective interventions for low-skilled adults possible?
• Universities: Where next for higher education policy?

Conference materials can be downloaded from the event page.

IFS secures core funding from the ESRC

The Institute for Fiscal Studies (IFS) has secured fresh core funding from the Economic and Social Research Council (ESRC) that will be worth almost £6.8 million over the five years from October 2010. This follows a lengthy open competition in which our research proposals and plans to engage with the users of our work were scrutinised by leading academics and other experts.

Volume 30, Number 1, March 2009: this issue contains a symposium on the economics of VAT cuts.