Oh, Darling: Why the budget, in its context, gives Labour a shot

Richard Robinson‘s Speech Bubble

Here’s the narrative. Budget Day, Wednesday, March 25th, with the General Election set for Thursday 6th May. We’re coming through an almighty global recession, and have been hit by the biggest slump this country has faced in 60 years.

Here’s the immediate task for Alistair Darling: to appease the financial markets, whilst at the same time impress and offer enough sweeteners to voters just days after the latest revelations of misdemeanours by key Labour MPs of the former hierarchy swept the front pages in a cash for influence scandal.

Here’s the seemingly impossible challenge then for Gordon Brown, Alistair Darling and the Labour Government: against all the odds, to rally the faithful and secure an unprecedented 4th term.

And here’s the question: how did Alistair do?

For the majority of the press there’s wholesale scorn and derision ranging from accusations of “saying nothing”, to “displaying envy and spite”, and “being timid in the extreme”. There are some anodyne words provided by The Mirror and The Guardian, and even the FT acknowledged that a lack of pre-election giveaway will have brought some relief to the markets. By and large, though, it’s a widespread battering for an overly cautious Chancellor.

As to the detail and salient measures contained in the budget, clearly the “top line” was to secure the recovery and not put it at risk. To help facilitate this objective, whilst at the same time offer further stimulus to the economy, the chancellor announced that stamp duty for homes selling for up to £250,000 for first time buyers for a two year period would be scrapped; there will be a £2.5 billion package for small business to boost skills and innovation; there’ll be an extension of the six month job or training guarantee for under 24s until 2012; a £2bn investment bank to back low-carbon industries such as offshore wind; and, for pensioners, winter fuel allowance rates are extended for a further year. Additionally, little reported as of yet, but an important announcement nonetheless, and one that is likely to strike a popular accord, is a £100m fund for local authorities to repair pothole damage as a result of this winter’s severe weather.

As to the outcome of the budget, yes of course it was political. But why should it not be? Either way, the jury is still out; its verdict will be known by the second Saturday in May.

Whatever the budget did or did not do it will invariably have little significant affect in itself on the outcome of the election. Its impact and that of other budgets, whichever party is in power, are felt only in people’s pockets in the weeks, months and years after. Furthermore, as Steve Richards has eloquently argued today:

“The next election will be a curious affair. On one level whoever wins will have to cut spending in ways they do not dare to contemplate in public.”

Labour remains as the party of government in somewhat of a state of suspended animation, awaiting its fate from an unforgiving and, regrettably, forgetful electorate. Yet for all of the failings and accusations you can throw at Gordon Brown and New Labour, two things are for sure.

First, you simply would not put your faith in Mr Cameron. His performance yesterday in responding to the budget was woeful. Admittedly, he’s good at soundbites – but his ignorance of economics and inability to understand the challenges ahead is palpable. Putting Cameron and Osborne in charge of the country’s finances would be like asking a first year medical student to perform triple heart bypass surgery.

Second, it’s probably a mistake in politics to take what is recent as a guide to what is normal. Recently, we know Labour has been under the cosh. Yet a clear-cut Cameron victory is far from certain – and the polls bear this out.

Now is not the time for Labour to throw in the towel; on the contrary, there’s all to play for. It just may be that, against all the odds, Brown and Darling together can convince the electorate over the next 6 weeks that it really is no time for a novice, however agnostic people feel towards New Labour.