And another thing…

COMMENTS on the Budget are welcome below, but in the meantime, here are my initial thoughts.

Overall, I thought the Chancellor struck exactly the right tone: serious but optimistic, which is what I hoped for when Carolyn Quinn invited me to think out loud on the subject on The Westminster Hour on Sunday.

The 50p tax rate was a shock, I’ll admit. Does this represent the end of New Labour? I don’t think so, and I’ll tell you for why. New Labour recognised that the “soak the rich” approach to taxation was folly, totally counter-productive and was essentially a philosophy which scorned personal aspiration. So, to sum up: A Bad Thing.

Nevertheless, higher taxes, when they’re imposed to raise revenue for a specific purpose and aren’t being levied for their own sake don’t of themselves mean that we want to return to our Old Labour ways. When national insurance was raised in the 2001 parliament, for instance, that was specifically to raise cash for the NHS: in other words, A Good Thing.

Today’s tax hike was, presumably, unavoidable in the current economic circumstances. But I hope we’ll see a commitment in a future manifesto to return to the 40 per cent tax level for higher earners when circumstances allow.

But I can see trouble ahead with the car scrappage scheme. Everyone who owns a car that’s more than 10 years old will get a grand from the government and a grand from the car dealer to buy a replacement. But when you go into any car dealer, the first thing they do anyway is bump at least a few hundred off the label price in an attempt to get you to buy the car. Does this mean that the discount that buyers regularly negotiate will now be mandated by the government instead? And if so, what’s to stop dealers adding a grand to the initial cost of the car before negotiations begin? Or am I being too cynical?

One last word about Cameron’s response: he started by saying that the government had left the economy in “a mess”. Well, of course he did. Part of the job spec for Leader of the Opposition clearly states that “the successful candidate must show a willingness, in responding to the Budget statement, to repeat the statements of all his predecessors that the economy is in the worst state ever. This must be repeated even when the Leader of the Opposition cannot truthfully claim that he has any solutions of his own or, indeed, would have done anything different had he been in government.”

So, job done, David.

I LISTENED, appalled, as usual, to John Humphrys’ attempt to bully Alistair Darling on the Today programme this morning. He clearly loves the sound of his own voice more than he wants to hear answers from whoever he’s “interviewing”.

At one point he sounded as if he was quoting from a Conservative Party press release, almost as if he was gullible enough to believe it: “But it (the government’s investment in the NHS) has all been wasted,” he declared, as if this was somehow a profound truth rather than a duplicitous piece of nonsense invented by a party that hates the idea of a publicly-funded health service.

Alistair did well, considering. But it’s amazing how accepting people are of this type of unprofessional hectoring masquerading as political interviewing. “He did the same to Osborne,” one colleague informed me, as if that excuses Humphrys in some way.

I’m told that my immediate predecessor as MP for Cathcart, John (now Lord) Maxton, managed to give Humphrys a taste of his own medicine when he appeared in front of the House of Lords’ Culture, Media and Sport Select Committee, of which John is a member. When asked what he saw as his role, Humphrys replied: “As representing the people against the politicians.”

John asked him: “But who elected you to represent the people?” Humphrys started to give a convoluted explanation of his unjustifiably high opinion of himself, and John interjected: “Answer the qustion – who elected you?” Still Humphrys wouldn’t give a straight answer, and when John asked the same question again, Humphreys responded: “If you will stop interrupting me I’ll try to answer!”

Poetic justice.

EVEN I was taken aback at how comprehensive Darling’s stimulus package was. I didn’t stay in the chamber to listen to “Boy” George Osborne’s pre-prepared denunciation – I’ve heard it so often before.

But back to the announcement. While yesterday’s (and this morning’s) media concentrated on the VAT and top-rate income tax changes, the chancellor had much, much more to say about (and to give away to) home owners, those who don’t yet have a home, those without a job, those in work, pensioners, parents, small businesses, medium-sized businesses, large businesses… you get the picture.

A lot of politics, too: he necesarily – and rightly – repeated time and again that the current crisis is global, not British (a point lost on almost all my commenters, but I blame the ejookashun system), while reminding his audience that the only suggestion received from Her Majesty’s Loyal Opposition so far is to sit on our hands and wait for the recession to pass.

Thius gets to the heart of the matter, because today, this pre-budget announcement, the incentive package is what government should be about. Government shouldn’t be about sitting on the sidelines watching sympathetically as people lose their homes and their jobs. That’s the Tory way; in the 1980s, the mantra of the government seemed to be: “We don’t believe the government should interfere in the running of the country.”

But let’s not forget that even if the government’s incentive package works, there will still be considerable debate about whether it has worked or not. Because at best, it will make the downturn less deep and less prolonged. It’s a bit like trying to assess the success of a PR campaign based on the amount of negative publicity you managed to avert – very difficult to quantify.

So where are we? VAT has been reduced from 17.5 to 15 per cent. Let’s have a very quck history lesson on VAT, shall we? When Labour left office in 1979, VAT was at eight per cent. Thatcher, who had explicitly promised, during the election campaign, not to double VAT, then doubled VAT, setting it at 15 per cent. Then, as soon as the Tories managed to get shot of Mrs T, they tried to repair the mess left by the poll tax, offering an across-the-board cut of £140 to every voter/poll tax payer. To fund this, they increased VAT by 2.5 per cent.

So, at least we can establish that the Tories have absolutely no grounds for criticising this government for having the temerity to reduce VAT.

As to the rest of the package, it differs from the Conservatives’ proposals in one vital respect: it exists.

‘Do-nothing Dave’ wants to be prime minister – it’s not enough for him to say “We wouldn’t have been in this position in the first place.”  Of course, any government of whatever political colour woud be facing exactly the same predicament, and any decent opposition has the responsibility to come up with alternative proposals. All Dave has proposed so far is a vague package of public service cuts. Which is, like, so 1980s.

The most controversial announcement, I admit, is on proposals to raise the higher rate of tax. This is not the death of New Labour; New Labour isn’t simply about a low tax regime – it’s about a new political culture in which tax rises, where they become necessary, are only reluctantly imposed and even then, only if the wider consequences for society can justify that measure. So when National Insurance was raised to generate income for the health service, that was New Labour in practice. 

But I confess to feeling no glee at the change; taxation for its own sake is, in my book, never justified. And today’s announcement is, fortunately, certainly not that or class warfare or any of that old nonsense.

After today, one thing is certainly clearer: the choice that will be on offer at the ballot box next time round. ‘Do-nothing Dave’ and his politics of pessimism and cuts? Or Gordon Brown and the kind of politics that says it’s right to intervene in the economy to protect people’s jobs and homes?