Thursday, March 25, 2010

Robin Hood - est 1997


Very quietly, Labour has spent the past thirteen years redistributing money without shocking anyone, according to a study from the independent Institute for Fiscal Studies , which formed part of their post-Budget brief . Those in the lowest percentiles of income have seen their income increase, while those at the top of the pile have seen a slight drop in their wealth. Making Britain more equitable is a huge challenge and one where Labour have yet to demonstrate major impacts.

Incidentally, when the Tories scream that the middle class suffer under the new tax arrangements, the IFS view is that the change is marginal.

This wasn't a typical pre-election budget - there were no huge giveaway offers. Perhaps it was closest to Roy Jenkins' statesmanlike 1970 budget, of which he commented that to stuff it with giveaways would be
a vulgar piece of economic management below the level of political sophistication of the British electorate
Although that didn't stop Geoffrey Howe tax cutting ahead of the 1983 election, Nigel Lawson's boom-boosting 1987 budget and Lamont's 1992 budget with tax cuts funded by increased borrowing. All I'll say is that Cameron used to work for that particular economic genius, although he doesn't like to talk about that, given that Lamont is usually regarded as a contender for the most economically incompetent Chancellor - although if Osborne ends up in the job, then we could have a new winner. More recent 'steady as she goes' budgets have included Ken Clarke's in 1997, which isn't a great augury for Labour's chances in the election in May, and Gordon Brown's in 2005.

I think the budget did exactly the right job. It has laid down some dividing lines - Labour will part-finance the costs of the stamp duty tax holiday by increasing the tax on very high value properties, but it has not terrified the City. Despite the doomsaying of the Tory sages, there is no significant chance of the AAA rating being reduced by the agencies.

Cameron gave a good, spirited response, but I think the budget has played reasonably well. Osborne remains under pressure - his performance on the Today programme on Thursday was exceptionally weak as Evan Davis ran rings around him, which is no great surprise, to be honest. As it goes, I thought that his budget response that evening was one of his better performances, although that bar is set particularly low and this is a set-piece, controlled environment. I continue to maintain that Osborne is a major risk to the chances of a Conservative victory and the bravest and best move that Cameron could make now would be to sack him and replace him with Ken Clarke, who has a gravitas and visible competence so clearly lacking in Osborne. As that would require foresight and courage on Cameron's part, then that seems rather unlikely. Channel 4's Chancellor's debate on Monday could prove very interesting, particularly if both Cable and Darling decide to turn on Osborne and he is prevented from reverting to speaking in slogans and remembered soundbites. Get him off the script and he flounders.
To demonstrate that weakness, a poll by ComRes for the Daily Politics shows that Brown and Darling have regained their status as the most trusted pair to see the country through the recovery, with 33% of voters preferring Labour and 27% choosing the Tory boy blunders - an almost exact reversal of the results of the last comparable poll. The YouGov trackers aren't shifting a lot - really moving a little within the margin of error to put the Conservatives up by one point to 37%, Labour down one to 33% and the Liberals marooned on 18%. An Ipsos MORI poll of the middling marginals - the ones that the Tories HAVE to win to get a majority indicates that the Conservative swing is only slightly better than the national figures - typically around 1% - than Labour. There are still a high number of undecideds and combined with the Liberal Democrat voters, they are likely to decide the next government.
Despite a consistent Conservative lead in the polls - although that lead has been trending down slightly over the past few weeks - we are certainly in a place where a hung parliament looks a very likely option and it is looking an increasingly realistic possibility that Labour could be the largest party in that parliament. Given where we have been in recent months, the fact that commentators are genuinely discussing that a Labour victory may even be a possibility is truly remarkable.
Now there's a prize worth having.

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