A thin offering
Matthew d'Ancona 10:42pm
So what's left? Bits have been falling off New Labour like body-parts off a leper. Prudence is long gone. Today, as I blogged earlier, we lost the all-important principle that wealth creation is the basis of enhanced social justice. Which leaves the famous statement of ideological eclecticism that defined Tony Blair's premiership if not his record: What Counts is What Works.
And I cannot see how today's package will work. This was an overwhelmingly political PBR, as one would expect of Gordon Brown: its ideological centrepiece was the fiscal stigmatisation of the well-off and the overt declaration by Alistair Darling that, since these voters had supposedly "done best out of the growth of the last decade", they deserved to be walloped. No mention of the revenues these individuals have provided to the Exchequer as entrepeneurs, employers and income taxpayers. Back we go to the crude socialist idea that there is a finite pie of wealth in which the prosperity of the few depends on the poverty of the many. Fourteen years after Blair became leader, New Labour's last death rattle resounded through Westminster's cold corridors.
Yet for all the swashbuckling "hang the rich" populism this was not a persuasive programme. As others have blogged below, the extent of the debt to which Darling and Brown have committed the nation is beyond extraordinary - matched only by the assumption, mysterious to this observer, that the economy will recover by the third quarter of next year. Strip out the symbolic goodies for pensioners, child benefit recipients, and motorists, a bit of capital spending brought forward and the temporary decrease in VAT, and this was astonishingly thin fare.
This enabled George Osborne to deliver a magnificent Commons performance and - crucially - to get debt rather than supposed Government munificence into the first line of most news bulletins. This has been the Shadow Chancellor's private objective in the past few weeks and in this respect he succeeded handsomely. He and his advisers believe that, pushed relentlessly and without compromise, the extent of public debt can become as salient an issue as it was in the 1992 US presidential election. Last week, Osborne was subjected to huge internal pressure to shift ground on the issue of fiscal stimulus and to relax his stubborn adherence to fiscal conservatism: the Gordon Brown of 1994 would have sympathised, having come under similar pressure from colleagues all those years ago when he was Shadow Chancellor to make big spending pledges. Osborne was having none of it, and today he reaped the reward. I think this may well have been the day the Tories sealed the deal, and it proves so to be, a lot of senior Conservatives will owe Osborne a gilt-edged apology.
Before today, the Tories were on the back foot: the critique that they have no economic message was the dominant narrative, dangerously so. It has not gone away. But the greater question now is entirely practical: will the Darling Plan work? That after all, is what counts.
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THX1138
November 24th, 2008 11:27pm Report this commentIn the real world I run a small B2B marketing agency specialising in B2B car leasing & my clients are really feeling the pain therefore so am I.
My clients and the leasing trade press were pretty happy about the PBR especially the VAT changes which make a real positive difference to their business. On the back of the good news I got a bit of extra work for December and firmed up some additional work for next year which made me happy and secured a couple of part time jobs at least for Q1& Q2 2009
I'm actually beyond caring about political ideology It's really serious & scary out there for people like me running a small business I just bloody well hope it works. As Matt says will it work, what else matters now!
Seasurfer1
November 24th, 2008 11:47pm Report this commentThe falling pound will negate the effect of the budgetary measures. Import Prices are set to rise by a minimum of 10%, in the early New Year, and the consumer will notice the inflationary effect in the shops. All sectors will see price increases - even food.
It may be worthwhile to see our once clothing industry make a comeback.
Deflation is not possible, we will only see massive Inflation-all punters who have cash, get into real estate, and watch the de-basing of the Pound, and the corrosion of its real value.
Brown will have great difficulty in borrowing £118B. The Money Market will not be able to sustain such a demand. RBS could not raise £20B. The cost of money will edge higher as it ignores Bank Rate.
Get ready for major names in the UK to vanish.
TrevorsDen
November 24th, 2008 11:54pm Report this commentIf all that the well off were were people like senior BBC executives or jonathon Ross or Eastenders scriptwriters than I would have huge sympathy with Browns attitude.
but that is not the case. To have real weath rather than fake borrowed weath - you need wealth creators.
Brown has just said up yours to them - because this budget is just the first labour step to push up taxes for anybody who has any money left and any wit and wisdom to want to earn some and better themselves.
Danni
November 25th, 2008 12:22am Report this commentThe Scottish Socialists are gonna sink this country. Blair will be spinning in his political grave.
Wilhelm
November 25th, 2008 12:43am Report this commentShifty Alistair Darling,
White hair, black eyebrows. I dont get that.
Wilhelm
November 25th, 2008 12:49am Report this commentDanni
They arent Scots.Godon Broon said to Diane Sawyer of American ABC news.
'' I come from north britain. ''
And the cockk crowed 3 times when Gordon Broon denied his own country, what a Judas. He couldnt even say the word Scotland.
David Short
November 25th, 2008 3:38am Report this commentIt's not New Labour any more. Blair left.
For better or for worse, this is real Labour.
David Short
November 25th, 2008 6:13am Report this commentIt's not New Labour. It hasn't been since Blair left.
HFC
November 25th, 2008 8:59am Report this commentHaven't heard anything from the union bosses yet; Labour's funders.
King Prawn
November 25th, 2008 9:24am Report this commentYes, but what will the wealth creators - Stay here and pay more tax or exit these shores for sunnier climes>
TrevorsDen
November 25th, 2008 11:32am Report this commentHas the business owner THX noticed what Brown is doing to pensions again?
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=177100&d=340&h=341&f=342
"The change means more people will spill over this limit and face a 55 per cent tax charge."
Has he noticed that the harder he works the more Brown will take off him in tax - that the corporation tax increases have only been delayed not abolished.
Banks and insurance companies will be among the big beneficiaries from the VAT cut.
I doubt very much we were headed for deflation so if we avoid that anyway I suppose Brown can claim success.
Lets face it an asteroid could land on Milton Keynes and Brown would declare success.
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