Another mistake by Brown

The proposals in the pre-Budget report were a desperate, knee-jerk response to the swing to the Tories in the polls. Rather than demonstrating Gordon Brown and Alistair Darling’s vision for the country, it revealed their commitment to blatant, vote-chasing expediency. Ultimately, this will make the country think less of them.

Martin Vander Weyer

There’s a new pair of eyebrows at the forefront of British public life. The Northern-rocked Governor of the Bank of England may have lost all traditional power of his once-splendid superciliary tufts – indeed, he might as well go the whole hog and have the damned things plucked, to discourage further comment – but the new Chancellor of the Exchequer, Alastair Darling, has a set to be reckoned with.

Beetle-black in contrast to his silver hair, distinctly livelier than his dull-silver tongue, they tell you everything you need to know about what’s really going on behind. During his speech to the Commons on Tuesday, we watched them struggle to hold the line dictated by the prime minister and his crew, rather than sag under the opposition barrage. During his interview with John Humphrys on Radio 4’s Today programme on Wednesday morning, you could almost hear them trying to knot themselves into the word ‘sensible’, chosen by his spin-doctors as the keynote for his defensive responses. And if eyebrows could sigh, that’s the background noise we’d all be puzzled by throughout the Chancellor’s media appearances this week. ‘How on earth did we get here?’ left-eyebrow whispers to right. ‘Why didn’t this fellow stick to being a slick Edinburgh lawyer, instead of coming down to Westminster and making fools of us.’ ‘I know’ replies right-eyebrow, sharply arched. ‘Frankly, I’d rather be dyed.’

It really was a self-revelatory performance on Tuesday, not so much in the Chancellor’s sober presentation as in the Downing Street group-think it allowed us to glimpse. There cannot now be any real possibility of a general election until the spring of 2009. The government has a working majority which only a raging e-coli outbreak in Westminster kebab shops favoured by Labour backbenchers could seriously dent. Gordon Brown has rightly identified that to consolidate what was, until a week ago, a pretty fair start to his prime ministership, he has to articulate a vision and start putting it into practice, thereby proving himself conclusively to be a cut above his predecessor as well as a safe pair of hands. Opinion polls, as we have just witnessed, can swing around by ten percentage points in no time at all. All those factors argued militantly against a knee-jerk reaction to the Conservatives’ upward blip in the polls after George Osborne and David Cameron’s party-conference triumphs.

Yet desperate knee-jerk was what we got, starting with that spectacular lurch on inheritance tax. Darling’s new IHT formula goes only about half-way to matching the Tories’ millionaires-only promise, but is still miles away from Labour’s previous position, which was to penalise as many of the middle classes as possible by failing to keep IHT thresholds in line with rising house prices. That was Gordon Brown’s overt policy for a decade, combined with an instruction to the Revenue to pursue IHT with all possible vigour in every case. Though in his maddening way he never engaged in the debate about whether IHT is morally justified, we can, I think, assume he sincerely believed that it was – and that every MP on the Labour side of the house agreed with him. Now he’s instructed Darling to give a great chunk of it away, and you can be sure that the pair of them will be under huge tactical pressure from Osborne, as the next election finally does approach, to give away even more. Vision? Blatant, vote-chasing expediency, more like, and in the end the nation will think less of them for it.

Still, at least millions of older people, especially widows and widowers, will now be able to pass on bigger nest-eggs to their children and grandchildren. That’s a happier turn of events than what Darling has suddenly done to Britain’s hard-pressed community of small-business entrepreneurs. In his haste to appease backbenchers and union barons with a swipe at private equity, he has imposed no less than a four-fifths increase – that is, from a minimum 10 per cent rate to a flat 18 per cent – in capital gains tax payable on long-term business assets. The move was designed to stop private equity players enjoying the ‘taper relief’ that took their CGT bills down from a possible maximum of 40 per cent. Experts always said it would be difficult to draft a change which caught a small number of City fat cats but continued to favour the much larger number of genuine start-up entrepreneurs. Too bad, sod the detail: a left-handed rude gesture was needed to compensate for the IHT bouquet delivered to the middle classes. Yet again we recall that for ten years Brown has lectured us about his devotion to the cause of enterprise and crowed about the many tax-wrinkles he devised to boost it.

‘But Gordon,’ we may imagine Darling protesting. ‘This is a crippling tax increase for thousands of people you’ve always promised to help. Where’s the, er, vision in that?’

‘Don’t argue,’ you can hear Brown shouting at the end of a very bad weekend. ‘Just get me some headlines.’ They’ve certainly done that. If I was one of Alastair Darling’s eyebrows, I’d be trying to scuttle behind the nearest ear in shame and embarrassment.