Bruce Anderson: Gordon Brown has damaged his reputation

If he tried to sell life insurance the way he delivers a Budget, the FSA would be after him
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The Independent Online

The economics are irrelevant. The Chancellor redeployed such a tiny proportion of the national income that it was hardly worth classifying as a Budget. But the politics are fascinating. Last week, Gordon Brown suffered a strategic defeat that could have a crucial effect on the next Election.

The Chancellor had a clear goal, which went far beyond small tax changes. He wanted to put David Cameron where he belongs: on a stretcher. Mr Brown must know that the recent polls have not exactly led Labour MPs to cheer. So he set out to deal with their alarm and despondency by exporting it to the Tories. The champ would flatten the kid.

The champ failed. At the end of the bout, most observers scored it as a win on points for Mr Cameron. In the circumstances, that was a triumph. The Leader of the Opposition's budget reply is the hardest debating task any British politician has to face, especially with Gordon Brown. Although most of his predecessors enjoyed wrong-footing their opponents, they did at least set out all their measures in clear detail. Not this one. He uses words to obscure meaning. If Mr Brown tried to sell life insurance in the way he delivers a Budget, the Financial Services Authority would be after him.

The FSA's writ does not reach the chancellor. He can economise with the truth. So he set out to clunk Mr Cameron. It did not work. With the help of Lord Turnbull, David Cameron clunked back. Mr Brown suffered more than a rhetorical reverse. In trying and failing to secure a quick kill, he neutralised Labour's most important campaigning asset. He also compromised his own reputation.

For the last three elections, Labour has claimed that a vote for the Tories is a vote to slash public spending to finance tax cuts for the rich. In this mendacity, Labour had an important advantage. Most voters do not understand economic growth. They think of the economy as a cake, so that an extra slice for tax cuts means less for health and education. They do not realise that if the economy grows strongly, it could be possible to cut tax rates, increase public spending and pay back government debt - simultaneously.

At the last election, the Tories proposed £1.7bn of help for pensioners. Labour fielded Alistair Darling, to warn the public that this would create a black hole in the national accounts. Far from being a black hole, it was around one day's public spending, but Mr Darling's claims were not greeted with hoots of derision. This is why David Cameron has largely refused to commit himself to specific tax cuts. He knows that if he did so, on however modest a scale, Labour would have him closing every school, hospital and doctor's surgery in the land.

Instead, Mr Cameron has said that he will "share the proceeds of growth'' between public spending and tax cuts. That is precisely what Gordon Brown has now done, even if the taxpayer hardly received a fair share.

Mr Cameron has spent months building his reputation as someone who could be trusted to take charge of the public services, and one poll actually had the Tories ahead on the NHS. Even before Wednesday, it was hard for Labour to deal with this. Now that Mr Brown has cut some tax rates without bringing public expenditure to a halt, it will be impossible.

Gordon Brown tried to counter-attack by claiming that the Tories' "share the proceeds'' policy would lead to a £21bn cut in public spending. The £1bn was added to give the figure credibility, so that it would not sound as if it had been invented - as it was. How could sharing proceeds lead to a cut? Which part of sharing, proceeds and growth does Mr Brown not understand?

That brings us to Wednesday's other consequence. Up to now, Mr Brown has had a reputation for honesty, even if anyone who reads Tom Bower's biography will wonder why. But as cut turned into con within hours of the Budget speech, that reputation was imperilled. Without it, Mr Brown is in trouble. He could hardly replace it with charm or rapport with Middle England.

On Wednesday, David Miliband looked thoughtful, as he should. He has a lot to think about, while others are finding a lot to talk about. I am reliably informed that he is now the main topic of conversation in No 10. Cherie Blair is desperate for him to stand. Margaret Thatcher's feelings about Michael Heseltine were benign in comparison to Mrs Blair's view of Mr Brown.

So Cherie should be encouraged by the Budget. As for Gordon Brown, if he is not worried yet, he ought to be.

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