The Budget will be remarkable for its continuity. This Chancellor - rightly - isn't for turning.

By Tim Montgomerie
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I don't know how many people have actually read the Moody's report from Friday but if it's uncomfortable reading for the Chancellor - and there's no denying that it is - it's even more uncomfortable reading for Her Majesty's Opposition which has taken such undisguised pleasure at Britain's downgrade. Moody's wasn't downgrading the UK because of the existence of the deficit reduction policy but because of its lack of progress. It actually warned that another and much more dangerous downgrade would be possible if it detected "reduced political commitment to fiscal consolidation". Those six words should actually strengthen the Chancellor's hand in the very difficult decisions that still lie ahead and very, very difficult decisions do lie ahead.

In my column for today's Times (£) I note that the Coalition will have delivered £48 billion of spending cuts by the end of this financial year. None of those cuts have been particularly easy but larger and more difficult cuts lie ahead. The size of the additional cuts (approximately £75 billion) may be less ominous than the nature of the remaining cuts. The lowest hanging fruit has been plucked. The easiest efficiencies have been pocketed.

George Osborne is criticised for not being a bolder Chancellor and those criticisms are not unfair. In my opinion he has taxed too much and cut too little. He should have used this crisis to simplify and rebalance the tax system. He should have eliminated all or nearly all of the subsidies that are inflating energy prices. He should have broken up the banks and introduced counter-cyclical financial regulations. He should have reformed trade union laws and (most importantly imho) adopted Wisconsin-style equalisation of public and private sector wages but it's easy for me to draw up such a wish list. The reality is that most or all of these things wouldn't be acceptable to the Liberal Democrats.

Moreover, it's also true that many necessary and tough decisions have been frequently opposed by Tory ministers and MPs:

• Many Tory MPs, for example, oppose cuts to defence, police and the pension entitlements of wealthier retired people.
• Tory MPs from the North have resisted plans to end national public sector pay bargaining; Tory MPs from the shires have resisted plans to reform planning and kickstart the housing market; socially conservative Tory MPs have resisted liberalisation of Sunday trading.
• Theresa May, Eric Pickles and Philip Hammond are said to be causing the Chancellor the largest headaches at the moment. All three have already presided over large cuts and without the police, the armed forces or local government erupting. They are now being asked to make cuts that are potentially as big as those already delivered.

You can certainly argue that George Osborne should have worked harder and perhaps more publicly against the considerable constraints he faces but you cannot deny the existence of those constraints.

His forthcoming Budget - his fourth - will not produce a dramatic change of course. There won't be the supply-side revolution that people like me believe is necessary to lift us out of the mess bequeathed by Labour. There won't be an even bigger Keynesian stimulus of the kind advocated by Labour (and that most fiscally irresponsible of all four parties - UKIP). What we'll get is a response to the Heseltine report. There will be further focus on the low-paid. There may be a further shift from current to capital spending. I hope there won't be any new gimmicks.

Most of all, however, the Budget will be remarkable for its continuity. This Chancellor - rightly - isn't for turning.