Hague's best hope: say little and pray for a recession

How should the Leader of the Opposition respond to a Budget that could have been given by a Tory Chancellor?

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DEAR WILLIAM,

Here are a few - entirely unsolicited - pointers to how you should handle your speech after today's Budget. My first piece of advice is don't look up at the press gallery before you speak. It's always a bit dispiriting watching the journalists rush out as soon as the Chancellor sits down. At least convention dictates that most MPs stay until you have finished. Never the less, they will be twitching to get out of the Chamber (poor Paddy Ashdown has to speak to a rapidly emptying House) to get onto their brokers, or at least to their local newspapers with the usual banalities - this is a black day/new dawn for our town etc. So you need not to go on for too long.

Which is just as well. Because, frankly, it's not going to be that easy this year. You have a number of problems of which the first and most obvious is the utter failure of this Government to fulfil expectations by being profligate with what they would no doubt call the people's money. You would have cheerfully killed for the borrowing figures Brown's going to announce today. All this "prudence with a purpose" stuff has a rather convincing ring about it. And while you can bang on about the deficit reduction being the legacy of the Tories' brilliant economic management - or more particularly that of Ken Clarke, the man you beat to win the leadership - quite a lot of people still remember how borrowing lurched out of control after the 1992 election. Labour governments weren't supposed to act like this. They were supposed to spend like maniacs and then have an economic crisis (like the IMF one in 1976). Sadly for you, Brown long ago learnt the lesson from all this.

There are a few other things you can't do. You can't join forces with those City hawks who will accuse him of not taking enough money out of the economy in taxes to ease the pressure on interest rates. To do so would fatally undermine one of the few attacks you can mount - on the taxes you hope he will raise. You can't attack him for spending money on education and health - I bet the leaks about Frank Dobson winning another pounds 500m for the NHS are right - without making yourselves even more unpopular than you are already. Nor does it cut much ice to accuse the Chancellor of being prudent for the sinister motive of making the country shipshape for EMU. You may be anti-single currency - and by the way, you might have a word with Michael Portillo and ask him why he seemed to be saying on Sunday that EMU might actually work - but are you against curbing the deficit in the way that the Maastricht criteria require? Surely not.

And you should be a bit careful about shouting U-turn when the Chancellor puts some money back into the purses of lone mothers. The cuts were yours in the first place - and a lot of North American polling experience shows that voters rather like U-turns. They mean that the government got it wrong before and is now getting it right.

Sorry to dwell on the pitfalls. Let's think about the positives. The advice you've been getting from your own experts is that the Chancellor will be less tough on business, especially small business, than his pre- Budget report suggested six months ago that he might be, at least in the short term. And tougher on consumers through higher duties on alcohol, tobacco, petrol, and so on. Peter Lilley would probably have done the same if he were the Chancellor. But that needn't stop you attacking Brown for taxing consumers.

Similarly, if Gordon Brown decides to abolish Miras - or cut it again - he will be following a path already mapped out by Ken Clarke. It was after all Clarke who decoupled Miras from income tax rates by bringing it down to 15 per cent. Likewise you should be rather careful about an all-out, detailed onslaught on any measures to close inheritance tax loopholes the Chancellor may introduce. Sure, the Major government was - in theory - attached to the idea of abolishing inheritance tax altogether. But a few of your own more intelligent MPs rightly think it's rather a good tax and that you don't make a more entrepreneurial society by creating a generation of rich layabouts who don't need to work because they've inherited so much dosh from grandpa. The point is that when it comes to your soundbite for ITN, you can still add Miras and curbs on inheritance tax avoidance to your hit-list of New Labour taxes; it's low politics but it's no less than Gordon Brown did with your 22 tax rises. Don't go mad, however. A little humility may be needed with an electorate that doesn't exactly trust you on tax.

One other tip: the advice you've been getting to scrutinise pretty carefully the widely trailed pounds 1bn or so for childcare is sound. If, as seems possible, the Chancellor gives help to lone parents and to couples who are both working, but not to couples with only one income, then you have a line of attack: aren't mothers looking after their children at home also entitled to a bit of childcare money - if only to get out of the house for a bit?

While it makes sense to try and attack the Budget as an onslaught on the middle class, it may in the end be quite skilfully calibrated. There will, for example, be quite a lot more consultation before any move to tax child benefit - which really would hit prosperous middle England. And this isn't necessarily the result of a Brown-Blair conflict. Just because Tony Blair never forgets that Daily Mail readers helped to win him his victory, it doesn't mean that Gordon Brown doesn't remember it too. And just because Gordon Brown wants redistribution to the poor by making it more attractive to be in work, it doesn't mean that Blair doesn't want that to happen too. The other difficulty is that the economy is in good shape - at the moment. A recession, if it comes, will make your life much easier. Don't forget that it was Brown who made the Bank of England independent. You can always remind the House of that to help him take the blame in future if it fails, after the agonies it is going through on whether to raise interest rates again, to deliver the soft landing everyone hopes for. (It'll also mean he takes the credit if they succeed - but he'll do that anyway.)

You get the Budget press releases on Privy Council terms well before the speech. Have your experts comb through them for anything unpleasant that Brown may not mention in his speech - it's the trick that Blair used more than once in Opposition. Try and find a clear simple message - Blair's depiction of a Clarke's "VAT on fuel budget" was a good example. And enjoy it. It's a good chance to get on TV. It's an advantage that its you and not Peter Lilley doing the job. You're a much better performer at the dispatch box than he is. And there's only so much you can do. After all, it was always going to be Gordon's day.

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