Political mood turns as Budget report is met with Tory taunts

20 October 2007

As Alistair Darling delivered his pre-Budget report on Tuesday, it was clear that a sea change had taken place in the House of Commons

The new ideas – a fixed annual charge on non-domiciled workers and a pseudo-increase of the threshold of inheritance tax (in reality a formalisation of an already existing provision which means inheritance tax starts at £600,000 ($1.2m, E867,000) for married couples) – were lifted wholesale or inspired by the Conservatives’ own plans. Even Labour supporters blushed at the blatancy of this. The rest of the proposals were old Labour. At the end George Osborne, the shadow chancellor, jumped to his feet and claimed authorship. Normally, he would look pale, forced to tear up pages of his prepared speech after being outwitted by Brown. This time, he was well prepared.

The Tories lost their fear of Brown when he pulled out of the general election last weekend – an event which seemed to invert the power scales. Two weeks ago, the Tories were regarded as being on the brink of collapse. David Cameron then proposed real tax cuts (raising the inheritance tax threshold from £300,000 to £1m for everyone) and seemed to recover. What happened next is crucial to understanding where politics is now.

It is not that Brown would have lost the election. The key to his decision lies in an aide memoire he brought with him to his monthly press conference on Monday. He told the assembled media that he “would have won” an election had it been held on 8 November. But in his note he had scribbled (in print big enough to be read by the cameras) that he “could have won”. The difference between “would” and “could” was crucial. He recognised he was in for a fight with the Tories; he wanted a massacre.

Psychologically, this makes all the difference to the Tories. Here is not a Great Clunking Fist, a fearless warrior ready to squash the Opposition. Instead they see a playground bully afraid of actual combat if it looks like being a fair fight. Even his incorporation of Tory policy on non-doms seemed to encourage Osborne. It was as if this confirmed the Conservatives had taken intellectual leadership.

The joint Comprehensive Spending Review and pre-Budget report offered no rival vision. Believing his own hype, Brown had forged an election agenda not for Britain as it really is but for a country conjured up by his selectively chosen graphs; where child poverty can be measured by income deciles and fought with tax credits, crime is falling and unemployment is low.

The Tories’ election agenda centred on tackling social breakdown and simplifying the welfare state. It was aimed at a country where street crime is rampant, joblessness endemic, immigration the issue which worries the public most and – crucially – where taxes are unacceptably high. Voters would have found that the Tory vision chimes far more closely with their own.