Ladies and Gentlemen stand by for the return of Prudence. In Gordon Brown's Budget, to be delivered in less than two weeks' time, there will be few spectacular fireworks. Mr Brown will not be going on another heavy spending spree. Nor, so I suspect, will he have much to offer in the way of tax cuts. The Chancellor's big theme will be the stability of Britain's economy, a situation, he will stress, that should not be taken for granted. In this cautious mode he will confirm that public spending will rise at a lower rate than in recent years even though the economy is growing faster than forecast. Against such a secure background, he will argue, enterprise and fairness can flourish. Thank you and good night.
The imminent return of Prudence does not imply that this most political of Chancellors has ceased to think politically, content to plod along without taking account of the broader political situation. The opposite is the case. He will seek to compare the stability of the economy with the alleged recklessness of the Conservatives' policies. Prudence is back for a purpose, part of which is highly political.
Not that Mr Brown has been especially reckless in recent years. The increase in public spending announced earlier in this term was substantial but also the minimum required. Mr Brown would have been much more foolishly irresponsible if he had not spent significant sums in an attempt to improve schools, hospitals and - with less enthusiasm - the rotting railways.
Nor can anyone accuse Mr Brown of being imprudent in his rush to join the euro. He declared last summer that his five tests had not been met. Do not expect a more enthusiastic endorsement in the budget. If anything, the statement last summer will seem like a gushing melody in support of Britain's membership of the euro, compared with the subdued words in the Budget that will rule out a referendum this side of the election.
Will it work - this concerted attempt to make economic stability a key political dividing line and the essential pre-condition for achieving progress in other areas? In theory, Tony Blair and Gordon Brown should have high hopes of establishing a more progressive feelgood factor than the one generated by Margaret Thatcher and Nigel Lawson in the run-up to the 1987 election. It is a significant achievement to invest heavily in public services without destabilising the economy and alienating voters. Even now voters moan about council tax increases, but complain less about the National Insurance rises introduced by the Chancellor.
At the same time. the Conservatives still have several questions to answer about their own approach to "tax and spend". Indeed, some of those questions are being raised by their own Shadow Cabinet members alarmed at entering an election campaign defending selective cuts in their sensitive policy areas. Even so, the Conservatives have two threatening lines of attack that worry ministers. As the election draws nearer they will claim persistently that public services are in a terrible state and, in spite of that, Labour would put up taxes again. In essence this will become a debate about which side you can trust. Ministers are deeply nervous about issues relating to trust.
As far as claims about future tax rises are concerned, Mr Brown has been assisted by the higher than expected growth rate. His black hole looks less deep now than it did even six months ago. The Chancellor will be keeping his fingers crossed that the economy is growing at least as fast by the time of the election. It is his strongest shield against claims that he will need to put up taxes. Even so, I predict that Labour will enter the election renewing their commitment not to increase income taxes in a third term.
This is an absurdly restrictive commitment for any political party to make. One of the reasons why Messrs Blair and Brown will choose again to be constrained is explained by a curious poll finding. Recent polls suggest that voters recognise improvements in some of their own local services, but assume that services across the country have deteriorated. It is almost impossible to put the case for higher taxes to pay for further improvements if voters assume that the spending already made has been fruitless.
This poll finding exercises and alarms senior ministers more than any other since they came to power. At the political cabinet that took place last month, one phrase dominated much of the discussion: "People are personally optimistic and nationally pessimistic." If this is the case, ministers have good cause to be alarmed.
Both Mr Blair and Mr Brown, supposedly masters of spin, despair of the media, especially the non-Conservative newspapers, leaping at every opportunity to highlight failures in the public services. I suspect that their worries about the media and the rise of Michael Howard are two factors that have brought them more closely together in recent months. Mr Blair has been known to observe that his relationship with parts of the British media is the equivalent of sharing a flat with a demented tenant. He no longer knows whether a saner relationship can be established by charm or by bashing it around a bit.
He has told friends that while other Prime Ministers have faced world wars or serious economic recessions for much of their time in office, his most constant challenge is the British media's attitude towards politics. Meanwhile the Chancellor laments the chances of forming a sustained progressive consensus when powerful voices in the media across the political spectrum slaughter the public services.
I have quite a lot of sympathy with their analysis, although it must be said that this is a common complaint from Labour governments. In the 1970s Harold Wilson's political secretary, Lady Falkender, declared that "while progressive journalists seemed always to be leaning backwards to be fair to the Conservative party, Conservative journalists also seemed always to be leaning backwards to be fair to the Conservative party."
The national pessimism is not the fault of the media alone, while no one can say the Conservatives have enjoyed a glowing press in recent years. More than any other factor, the war against Iraq has made voters wary of ministerial pronouncements on public services or any other matter. Mr Blair is realising with some alarm that there is no escape from the war. He is contemplating making a big, cathartic speech on why he went to war, explaining in detail each stage towards that decision. He will only make the speech if it helps to achieve closure on the issue. If closure is the aim he will not be making the speech for some time.
Under normal circumstances, the return of Prudence in the Budget would boost the Government. I suspect that by the time of the election the strength of the economy will indeed be the Government's ace card. The fact that no one can be sure - including some cabinet ministers, who are beginning to fear privately that they might lose the election - shows how febrile the political situation has become.Reuse content