Friday, 23 March 2007

Budget - What a Difference a Day Makes!!


Conservatives are less certain today than before the Budget. Brown’s 2p cut in the 22p tax rate has left many Tories wondering how to respond. Cutting taxes was not on the Tory horizon: the opportunities for Labour to proclaim the Tories as tax cutters and not investors in services would have been easy to make. Therefore, tax cuts were not mentioned but already, post-Budget, right-wing Tory peers have called for Cameron to pledge to cut taxes.

Therein lies Brown’s hope.

Cameron is desperate for Tory unity to continue but tax cuts are now firmly on the agenda and, that is the risk for Cameron. Any debate within the Tory party on tax cuts – even before any policy decisions are made - will be flagged as the old Tory ways resurfacing. Any policy decision to cut taxes will be attacked unremittingly.

Many bloggers have said that Brown has made it safe for Tories to talk about tax cuts. Not so!! Brown’s move, which I deplore, to remove the 10p band brings in, I believe, £7 billion whereas the 2p cut to 20p cuts the take by £8 billion. If (or when) Cameron pledges to cut income tax Brown has the defence that his 2p reduction was hardly a tax cut because the overall budget was tax neutral. Therefore, there is danger if Cameron pledges tax cuts. But the Tory peers have already applied pressure for cuts and have shown, if not a split, a difference in approach.

If Cameron doesn’t talk about tax cuts, Brown will harp on about his cut in Income Tax. Uncertainty again for Cameron.

However this actually plays out, Brown has succeeded in creating uncertainty within Tory ranks. For Brown and Labour that is a major plus. Does the Cameron team have the political nous to focus on the Budget’s shortcomings and to hold the line with those wanting tax cuts?

This is a big test for Cameron.

An over-reliance on Stalin jokes and a lack of intellectual rigour in his reply to the Budget statement suggest he may not be quite up to the task. [I must nail my colours to the mast. I do not want a Conservative government. I do not want a rerun of a Blair government but want a Labour government which is noticeably left-wing and considerably to the left of the current government. I know that I am heading for disappointment.]

How does Brown emerge from the Budget? That he can handle Cameron is obvious but the approach he brought to the Budget has done nothing to implant the idea that he is a statesman. A heavyweight, he undoubtedly is but a statesman certainly not. Brown was far too political: too tricky several papers have called him. There is his danger. Well, there is one of the many dangers for him but yet he will be comforted by the uncertainty he can see within the Conservatives. No doubt he will be concentrating on developing this uncertainty.

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