Steve Richards: Darling prepares for his ultimate test

Perhaps he should say: 'Read what I said in December. Thank you and good night'
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The Independent Online

Tomorrow's Budget marks the biggest political test for Alistair Darling in his long and extraordinary ministerial career. So far the Chancellor has delivered two Budgets and three pre-Budget reports. In each case Labour's poll rating has fallen significantly immediately afterwards. If the same happens again tomorrow Labour will be doomed even if Stephen Byers becomes a monk and Unite settles its dispute with BA. Behind in the polls, Labour cannot afford a big post-Budget drop so close to an election.

Darling has faced epic, nerve wracking events since entering the Treasury. I doubt if anything can beat the near collapse of the banking system, but in terms of the Government's fate tomorrow is his make or break moment. He must sometimes pinch himself that he is yet again in such an exposed and highly charged position. Before becoming Chancellor he had a genius for keeping out of the news. Since moving into the Treasury he has never been off the front pages, in the eye of history-making storms and in darkly comical contrast to the tranquility of his previous ministerial life.

He has changed too as a politician, becoming more assertive and interested in a modest way at self-projection in the media. Before becoming Chancellor, he did not give many interviews. Now a ubiquitous interviewee, he invited a journalist to join him on holiday during the summer before last, the one in which he predicted the worst economic crisis for 60 years. Subsequently Darling has claimed vindication, but he had no idea that those particular words would dominate the news for days and for sure the rest of the Government did not know either. The Chancellor has not always been sure-footed as his profile has soared.

Tomorrow he needs to be. The reasons his previous big statements have flopped in the polls are complicated and by no means entirely down to him. His first pre-Budget report took place in the mad period immediately after Brown had called off an early election. Darling was forced to add some populist measures at the last moment on the assumption than an election would be called. Everyone could see the joins, the visible contortions.

There is a neat symmetry about tomorrow's event, a beginning and an end. Once more Darling announces a pre-election economic statement. But this time there will be an election and he has no room to make populist gestures, the precise opposite of his first outing in the autumn of 2007. Gimmicks would be counter-productive in the current sceptical climate, as they were then.

No wonder the political mood is so deliberately subdued in advance compared with every single Budget since Labour came to power in 1997. There were no leaks to the Sunday papers about juicy giveaways and not much for the dailies either. The message from No 10 and the Treasury is that the Budget will be serious and boring rather than spectacular.

There is a practical reason for the lack of revelations. Darling delivered his pre-Budget report only last December. In effect that was a Budget too, with tax rises and the increase in spending on education commanding most attention. Long ago pre-Budget reports became Budgets. So this will be Darling's second Budget in the space of three months. There are limits to what more he has to say, or do. He has little spare cash, if any, and the spending review has been postponed until after the election. Perhaps he should stand up and state: "Read what I said in December. Thank you and good night".

That will not happen. Instead Darling must convey an impression of commanding activity and seek to make sense of the seemingly daunting chaos all around him. On the whole there has not been too much wrong with the substance of his previous economic statements, but the politics were poorly handled. His pre-Budget report in the autumn of 2008 was typical. On the whole the good news, the VAT cut and spending increases, was lost in the shock of the borrowing levels and the income tax increases on high earners. No work had been done preparing the voters for the borrowing figures in advance. There had been no pre-emptive strike to avoid the "Death of New Labour" headlines that greeted the Chancellor's words on tax. His statement contained no defining themes or memorable phrases on which a bewildered government could cling.

Instead the quick-witted and easily underestimated shadow Chancellor, George Osborne, moved centre stage in the afternoon, briefing journalists on what he regarded as the report's fatal flaws, and the momentum moved towards the Conservatives once more. Indeed I recall on the Saturday after that particular pre-Budget report attending the annual conference of the left of centre Progress group. Minister after minister declared that the collapse of the financial markets was a big moment for the left of centre. As one of them was hailing the start of their new era news surfaced of an opinion poll in The Sunday Times giving the Conservatives a fourteen-point lead.

I get the impression that senior ministers would take a goalless draw from tomorrow's Budget. If polls do not show a widening of the lead for the Tories they would regard it as a success. But as far as Brown is concerned the Budget will not be his last word on economic policy. In the election campaign it is highly likely that he will pledge not to increase VAT for the whole of the next Parliament, a move that would put the focus on the Tories' plans and what Osborne plans to declare in his recklessly pre-announced "emergency Budget".

Geoffrey Howe did not announce that he would hold an emergency Budget when he was shadow Chancellor in the build up to the 1979 election, but he had written one which he handed to the Permanent Secretary within minutes of walking into the Treasury after the Conservatives had safely won. Osborne has done the opposite, promising an emergency Budget without being entirely sure what will be in it.

The battle over "tax and spend" will be fought more overtly when the election is called. As far as Labour's election strategists are concerned, tomorrow's Budget is a stepping-stone to the campaign. A decent and honest politician, Darling faces the ultimate test of the Chancellor as an artist, delivering a message that appears to focus entirely on lofty thoughts about the economy while keeping his desperate party in the game.