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?