Budget 1999: The Sketch - Washing away the Opposition with a little Tax-and- Go

THE CHANCELLOR prides himself on his far-sighted prudence when it comes to the national finances. When it comes to reading matter, though, he needs things a little nearer if they are to be seen clearly. As he readied himself to give his Budget speech yesterday he heaved two thick green-bound volumes on to the dispatch box.

For a moment it looked terrifyingly as if his speech might run into next week, but then he laid a slimmer sheaf of papers on top. The books were merely a plinth, it turned out, not the text itself. Could he elevate the spirits of Labour MPs as easily, though?

The year alone allowed Mr Brown a large leeway to turn up the epic high style: he later promised that there would be "no tax rise on alcohol this side of the millennium", which sounds like an aeon of intoxication but actually means only 10 months, and he had begun his speech on an equally grandiose note. With "the last Budget of the twentieth century", he said, he would leave behind the sterile old conflict between governments of the left and right.

Just as some shampoo manufacturers promise you cleansing power and conditioner in one bottle, the Chancellor was proposing an all-in-one deal. One can almost imagine the next party political broadcast. What? Take two parties into the next century when one will do? Not me. I use New Labour's Tax- and-Go.

And he felt confident enough about what he had to offer to Labour backbenchers to begin with wealth creation rather than social fairness. First of all he announced a variety of measures designed to encourage small business and discourage those Tories who had thought that he might be vulnerable on this issue. Indeed Mr Brown was positively teasing in his performance - playing with expectations in a way that echoed the successful misdirection over the right to roam announcement.

Tories cast down by the revelation that corporation tax was to be further decreased thought they had their first glimpse of light when the Chancellor turned to his levy on the business use of energy. Mr Brown allowed the weight of this new burden on business to rest deliciously on their consciousnesses for a moment. Then, just as they were stumbling upright, he bowled them over again: "These increases will be revenue neutral!" he declared triumphantly, announcing a cut in national insurance to offset the new burden.

Labour MPs crowed at the sly post-script, which became the model for all of the Chancellor's succeeding announcements. He allowed Tory hopes to rise only so that the fall would be more painful.

He was at his most feline when he came to the much-expected introduction of a 10p rate of tax. Given that this could be introduced only when it was prudent, he said solemnly, it will not start in April 2000. Labour backbenchers sagged and Tories perked up.

And then, after a pause of malicious perfection, Mr Brown delivered the kicker: "It is prudent for taxpayers to get the benefit now!" Labour MPs waved their order papers with an unforced glee. It was hard to know what they relished more - the delivery of another Labour promise or the manner in which it had been rubbed into the Opposition's face.

A lone Tory voice ventured a desperate kamikaze attack - "Is that it?" it said, generating a great guffaw from replete Labour backbenchers. It wasn't, because Mr Brown had one last afterthought, a promise that the basic rate of income tax would come down next year by a penny in the pound and the cue for a happy tumult from the Labour benches.

By the end of his speech he appeared to have taken from nobody and given to all - and all that Mr Hague could do was call in question this apparently magical levitation. He did pretty well in the circumstances but after a performance of such catty brio he couldn't help but come across as the mouse that roared.

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