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As Gordon Brown prepares for his tenth Budget on March 22, speculation is rife that it could also be his last. And certainly you could be forgiven for thinking that he has already gone a long way towards clearing the decks. The Pre-Budget Report (PBR), only three months ago, itself looked remarkably like a mini-budget: in terms of revenue raising, the net impact was four times the size of last March’s Budget proper. Is there anything left to do?

Certainly, the two set-pieces – on the economy and the public finances – have been put to bed for the time being. Last December, the Chancellor bowed to the inevitable, halving his estimate of GDP growth in 2005 and bringing the forecast for this year down into line with the consensus 2-2 ½ %. Private commentators may be less optimistic than the Treasury about prospects thereafter, but at this stage there is nothing to be gained from tweaking the numbers.

Similarly, there is no reason to revisit the financial projections so soon after the PBR revisions. Any imminent danger of breaching the famous ‘golden rule’ of balancing the books over the economic cycle was defused by last year’s redefinition of the cycle, now deemed to run from 1997 to 2008.

And judging by recent data, a new-found strength of tax receipts means that the Chancellor will be able to re-confirm that the public finances are on track without the need for the swingeing hikes in personal taxes which so many have been predicting for so long.

The tax take is, of course, still slated to rise, but the hope is for an autonomous increase in revenues through fiscal drag (when incomes are growing but the tax system is not fully indexed), an increased yield from buoyant financial market activity and ongoing anti-avoidance measures.

But just because the budget looks like being fiscally neutral does not mean it will be a do-nothing budget.

No doubt there will be the usual discussion of the UK’s poor productivity performance and attempts to improve it, and an update on the public sector efficiency drive designed to keep up frontline service delivery as public spending growth slows. The aim of eliminating child poverty may require some further tweaking of the tax credits system and there may be more measures to alleviate “fuel poverty” as energy prices continue their steep rise.

Of particular interest to pension funds and other investors will be whether the Chancellor addresses the squeeze at the long end of the index-linked gilts market, which has driven real yields to extraordinarily low levels. Mr Brown has hinted at a change in funding policy, but might this also have implications for the government’s borrowing rule, which stipulates a maximum debt/GDP ratio of 40%?

Additionally there are loose ends to tie up – for example clarification of the new Sipps pensions regime ahead of A-day, and allowable shareholdings in REITS (property investment trusts) – and the Chancellor will probably be unable to resist raising a bit of revenue from smokers and the like to redistribute elsewhere. But major new initiatives on either tax or spending would come as a surprise.

If the main message of this year’s Budget is steady as she goes, there are difficult decisions to come. A sharp slowdown in total public spending growth is pencilled in from 2008 – if not, taxes will have to rise or the government’s borrowing limit relaxed - but the pain has yet to be allocated amongst departments. However, it looks as if these are questions for another day – and possibly another Chancellor.

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