Michael Brown: The most irresponsible budget I have ever heard

The Government has painted the opposition as the 'do-nothing' party

Related Topics

Prepare for a general election next year – if not in the spring, certainly by the autumn. Alistair Darling's temporary tax giveaways (much of which – especially the VAT reductions – will be clawed back in 13 months time) has all the hallmarks of addressing the political rather than the economic cycle.

Every cabinet minister will be under orders never to mention the "election" word. But it is inconceivable that Gordon Brown will want to risk losing the short-term advantages given by this pre-Budget report, before unemployment rises relentlessly to three million by the end of 2009.

This emergency pre-Budget report was the most irresponsible and profligate I have ever heard. But if Labour can persuade voters to focus only on the short-term, it amounts to one of the most politically generous attempts to bribe them with their own cash. It puts into the shade all previous pre-election giveaways. In terms of economics it is a huge gamble with the public finances. But in terms of pure politics it may yet turn out to be a triumph. By emphasising the immediate reduction in VAT and the bringing forward of child benefit uprating, tax credit increases and pension increases (the Chancellor is also bunging an extra one-off £60 payment to single pensioners and £120 to pensioner couples) the only conclusion must be, therefore, that a quick dash to the polls is uppermost on the Prime Minister's mind.

The notion that borrowing on such an unprecedented scale can ease a recession has always been nonsense and everything in yesterday's package will make the recovery even more difficult in the long run. How on earth Mr Darling can claim, with a straight face, to make predictions about the books being in balance by 2015/16 defies belief. What is certain, however, is that whoever forms the Government, after the next general election, will look back on this report as adding to the causes of all our future economic woes. It was only six months ago that the Chancellor made his over-optimistic forecasts about growth of 1.75 per cent for 2009 which turned to dust within weeks. If his forecast a year ahead was so inaccurate, how can voters trust his judgements of future growth and borrowing forecasts for up to six years ahead.

But no one should under-estimate the temporary breathing space this pre-Budget report has given to the Prime Minister. Combined with the reductions in mortgages, several million voters will see their disposable incomes rise by an average of £100 a month – provided they remain in employment.

The Chancellor is hoping that this additional cash, aided by the VAT reductions, will continue to be spent. I doubt this will actually occur. Surely after all that has happened following the credit card binge, most house-holders – having already learnt to cut back on discretionary spending, following the fuel and food price increases earlier in the year – will squirrel away any spare cash for the nightmare that lies ahead when the national insurance increases (an income tax rise in all but name) kick in in 2011.

Nevertheless, all this leaves the Tories in a tricky place. George Osborne is right to emphasise the ticking tax time bomb that has been placed in front of every elector, regardless of which party forms the next government. But there are enough short-term crowd pleasers to energise the Labour base with a clearly redistributive package from the super rich to Old Labour's core voters. Although the decision to increase the top rate of tax to 45 per cent for those earning over £150,000 raises little revenue, it will be well received by anyone angry at fat cat city slickers. The Tories will find it difficult to oppose this gratuitous tokenism but it will play well on the council house doorsteps.

Logic says the Tories should oppose every major measure announced yesterday. But the politics make this difficult. While Mr Osborne effectively summed up the nature of the recklessness of this pre-Budget report, he is open to the charge that he has no alternative to offer to address the current crisis. The Government has successfully painted the opposition as the "do nothing" party. A party vice-chairman, John Maples, stated a home truth when he said that recessions had to "take their course".

Frankly, there is probably little the Tories can do, in the short-term, apart from sit out their dilemma in the hope that the rise in unemployment will make voters understand that this package will turn out to be a chimera. And unless the Tories face up to recommending real reductions in public expenditure, the only choice at the next election is which party voters prefer to increase their taxes.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

IT Portfolio Analyst - Prince2

£45000 - £50000 Per Annum: Clearwater People Solutions Ltd: Our client, a glob...

Project Co-ordinator - Birmingham - Permanant

£20000 - £25000 Per Annum Plus excellent benefits: Clearwater People Solutions...

Head of Maths

Negotiable: Randstad Education Group: Head of Maths position at a prestigious ...

Trainee Recruitment Consultant - Birmingham - Huxley Associates

£18000 - £23000 per annum + Commission: SThree: Huxley Associates are currentl...

Day In a Page

Read Next
The view from Arthur's Seat, Edinburgh  

Scottish independence: Why I can't wait to leave London and live in a free, independent Scotland

Yannis Baboulias

Scottish independence: Learn from Quebec's mistakes and beware last-minute promises. Vote Yes.

Sol Zanetti
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week