Digesting the Budget

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Digesting the Budget

Post by BASEL » Mon Apr 27, 2009 12:49 pm

Digesting the Budget
Fri Apr 24 10:49AM
There's something a bit predictable about frontbench politics. That's why, on one of the most significant Budget days in recent times, politics.co.uk went a-hunting among backbenchers with constituencies around the country for a better sense of reaction to Alistair Darling's announcements. We certainly got it.

The Labour reaction

New Labour might not be dead, as Gordon Brown insisted yesterday, but you might have thought his 350-odd MPs had at least entered some sort of coma given the amount of noise they made during Darling's Budget statement. Even their cheer as he wrapped up was tepid; it was in stark contrast to the good old days of the boom.

How different things were then, and how serious they are now. Do Labour MPs really believe, as Hazel Blears said, it was a "ten-out-of-ten Budget"?

The answer appears to be: almost.

Take Emily Thornberry, a London MP with the least green constituency in the country. She did her best to defend the Budget as "very careful and sensible".

This, it should be noted, is the Budget which committed the government to borrowing more than all its predecessor since the formation of the Bank of England put together. Yet Thornberry's quiet conviction was compelling.

The numbers are large and on the face of it they're quite frightening - but rather than be whisked off by Tory hysteria you have to listen to what it is that the chancellor says he's going to do in order to be able to slowly pay this back," she said.

The Cabinet has struggled to get this message across. It was there in the Budget, but blink and you'd have missed Darling's insistent note that not undergoing his public borrowing "would lead in the end to higher, not lower, debt".

Thornberry put it much more effectively. Referring back to her own graduation from university in 1982, she recalled there was no milkround for graduate jobs that year. The prospect of a similar situation taking place under a Labour government, for her, is unthinkable.

"The alternative is to allow an entire generation of young people to never get work, to affect the poorest, to undermine our businesses, to allow savers to lose all their money," she pressed.

Unfortunately, as Bolton's Brian Iddon reflected, being right doesn't necessarily mean you win the argument.

"We know the Tories are out to hammer us - perhaps at the moment they have a lot to hammer us about," he admitted. "But I just ask people to ask what the Conservative policies are. The Conservative policies would be much more damaging."

John Battle, at least, remained optimistic. He thought Darling had come out of a "very tight corner" very well. "I felt if we can spend a bit more to cushion people against unemployment, that's the best we can do for now."

The global economy switched downwards very quickly; maybe it will switch upwards just as fast, he suggested, giving Darling the two-year turnaround from negative to positive 3.5 per cent growth he expects.

Sympathy and contempt

Compassion for Darling is not exclusive to the Labour party. An unlikely figure providing support for the chancellor is the Liberal Democrats' Martin Horwood.

"You do have to feel a little bit of sympathy for Alistair Darling - he's presiding over a collapsing economy and he really didn't have a lot of room for manoeuvre," he mused.

"So he had to present things like not cutting pensions or just taking the advice of the environmental committee as major headline items and really it was fairly thin stuff."

Horwood was critical, of course. He said the failure to change things that were "obviously mistakes" - like the VAT cut - has serious consequences. That, he lamented, is what happens when you have a "rabbit in the headlights" approach.

Far more devastating in his assessment was the SNP's Angus MacNeil, the member for the Western Isles. He was still stewing after Brown refused to answer his question in PMQs about the £1 billion he claims Scotland will be losing in spending cuts.

"This spin culture still continues in Labour and they can't call a spade a spade. A cut's a cut, and there are very hard times coming," he moaned.

There wasn't much other than misery from MacNeil. The UK, he said, is in a "mess". We're facing a "nightmare scenario". And there was very little in the Budget, of course, for Scotland.

"The good news that was in it will unravel in the next few days. It's a Brownian chancellor's speech - the good news was in it but I think the bad news is going to come out."

A daunting prospect

It appears we're all doomed - and that's something the Conservative party needs to be very worried about.

For if the polls are right and David Cameron does not make any spectacular errors in the next 12 months, the Tories could be finally returning to power after 13 years in the wilderness.

No surprise, therefore, that Labour's management of the economy is preying on their minds.

John Hayes, the shadow minister for higher education, skills and lifelong learning, said: "It's absolutely right we're in a pickle but you have to ask yourself the question, why? Given that Gordon Brown was in charge of our economy, first as chancellor and then as prime minister, it would be ludicrous to assume anything else than he has some responsibility for that."

Canterbury MP Julian Brazier put being 'in a pickle' a different way. "No government in the history of this country has ever allowed the country's finances to run out of control in this way," he fumed.

"The key thing is they are admitting now to more than doubling the national debt and, as David Cameron pointed out, their figures are highly suspect. Their position is much, much worse than they're presenting it, even on their forecasts which are too optimistic."

This is bad news for the Conservatives, who have reacted to the Budget with innate suspicion.

"We've seen a very dishonest Budget here," shadow Wales secretary Cheryl Gillan said. "We've seen a chancellor and a prime minister playing politics with the Budget at a time when we have one of the most serious financial crises this country's ever faced."

What is most concerning for the Conservatives, of course, is the economic legacy Labour will leave them if they do end up forming the next government.

"The challenge that David Cameron will have, assuming he's prime minister next year, is this nightmare inheritance that he takes over," Tim Yeo, chairman of the environmental audit committee and MP for Suffolk South, said.

"A lot of the commitments being announced in today's Budget extend well into the next parliament - both spending and tax commitments. It's going to be very hard to change those so in a sense a big chunk of the first Conservative Budget has been pre-empted by what was said today."

Gillan doesn't mince her words about this fear either. "We are extremely worried because the mismanagement of Labour has left the finances in a worse state. I think we will inherit a worse financial position than any incoming Conservative government has ever seen."

While Labour MPs are worrying about how to persuade voters this Budget is in their best interests, Tories are already focusing on how to deal with its decade-long aftermath.

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