So we’ve seen the future, and it’s red. Even though Alistair Darling got all his bad news out first, there were gasps from the Tory benches at announcements that fulfilled the gloomiest of forecasts. Yes, the economy is set to shrink by 3.5 per cent this year; and, yes, borrowing will hit £175 billion.
Even if the Red Book (never has a document been more aptly named) doesn’t produce more horrors in the small print, the near future looks bleak, even viewed through the Chancellor’s rose-tinted spectacles.
And yet it’s not all bad news. Long ago, Labour voters would have pinched themselves at its boldness. In the days when Tony Blair was schmoozing billionaires and Peter Mandelson was declaring New Labour to be “intensely relaxed about people getting filthy rich,” Mr Darling could never have imposed a 50 per cent rate of tax on those earning more than £150,000.
This, at long last, was a Robin Hood Budget, taking from the rich to give to the poor. Arguably, if Gordon Brown had been so redistributive long ago, the government would be far more popular today. They couldn’t do it then. But today, with the City watching anxiously and the corpse of Prudence twitching in the corner of the Commons chamber, Mr Darling prepared to soak the rich.
In the end, it wasn’t a difficult decision. I understand that slashing tax relief on pensions for top earners was regarded by both the Chancellor and Gordon Brown as wholly uncontentious, and even raising the top tax rate from a planned 45 per cent “did not feature on the late-night list” of items to be wrangled over on the eve of the Budget.
While the move may raise less than Mr Darling expects, his move was not only right. It was also tactically clever. With both the Fabians and Compass detecting huge support for taxing the wealthiest more heavily, will David Cameron ditch the proposal or stick with it and invite much Tory anger?
Meanwhile, those who fear that Labour long ago lost its soul will be heartened. No, this wasn’t a Lloyd George people’s budget, but it was an attempt to deliver fairness, albeit under the tightest of constraints. Mr Darling’s attempt to make a little go a long way was akin to the miracle of the loaves and fishes, only without the miracle.
So many people will be disappointed. In particular, child poverty campaigners – who had thought the Chancellor might do more – decried his small rise in tax credits as enough to give a poor child less than a pint of milk a week.
But the unexpectedly bold moves, as I wrote earlier this week, were always likely to focus on the rich and the young jobless.
Mr Darling did, as expected, promise a job or training to all 16-24 year-olds out of work for a year. Quite right too. Even so, his grand pledge not to consign a generation to the scrapheap rings slightly hollow. Neets (those not in education, employment or training) are not just a by-product of recession but a growing army of those failed by ten years of a Labour government.
There was some other moderately good news. There wasn’t the cut in overseas aid that some charities had feared. Helping disabled children and grandparents who act as family childminders was a small but symbolic sign of where Labour may move next. The Budget done, Gordon Brown will be shifting his focus towards the big pre-election debates, such as the family, education, health and crime.
Has the Budget changed the mood? Maybe. There were almost no seismic (or even vaguely startling) announcements, aside from the mountain of debt. Trident and ID cards remain, alas, safe in this government’s hands. Still, Mr Darling may have done enough to draw a line under a dreadful period in which even welcome moves, such as the move to derail MPs’ gravy train, have backfired. The PM’s rictus grin as he announced the move on YouTube put one in mind of a tortured hostage instructed by his captors to smile for the cameras as evidence that he was being kindly treated.
But Mr Brown also called in his special advisers this week to apologise to them personally for the debacle of the Damian McBride affair, assure them that his focus was wholly on policy and tell them that, in his view, they could win the election.
Whether he has a chance will depend, in part, on how the Budget is received. First signs were that the City was staying calm, although critics may be waiting to see what’s in the financial services reform white paper, due out in a fortnight, before giving their full verdict.
Tories, predictably, will regard Mr Darling’s announcements as shameful proof that Labour, having excavated a pit for itself, is carrying right on digging. Labour supporters, by contrast, may admire the move to a more progressive tax system that favours those on modest incomes. A pity, they may think, that the government didn’t do it long ago.
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