Labour party

Thursday

Fraser Nelson

Those hidden cuts in full

The truth about the Pre-Budget Report was revealed today by the Institute for Fiscal Studies: the new National Insurance tax will hit everyone on £14k or over, not £20k – and there are implied 19 per cent cuts of some £40 billion in the “non-protected” areas. The event was sold out, because it now has the reputation as the only place you learn the truth about Budgets passed by this government. Yet again, Gemma Tetlow from the IFS has unearthed the cuts which the Chancellor felt he had to conceal from the public (and – unwittingly, I hope – lied about this morning on the radio). Coffee House showed you yesterday that the

Peter Hoskin

The cuts unveiled

Well, as expected, the IFS have put the lie to Darling’s claim that the budgets of non-ringfenced departments would be “pretty much flat”.  Here’s how Nick Robinson reports it: “The Institute for Fiscal Studies says that government plans imply £36bn of cuts in departmental spending ie over 19% from 2011-2014 in order to protect schools, hospitals and increase overseas aid. They say the police pledge is meaningless. They also say that defence, higher education, transport and housing are most likely to be hit.   The cost of paying back the debt over the next eight years is equivalent to £2,400 per family in taxes or cuts over that period.” UPDATE:

Peter Hoskin

The Darling deception

Alistair Darling normally strikes us as an honest man dropped into an impossible situation. But whether he misspoke, or whether he set out to mislead, he told a lie on the Today Programme this morning which needs to be highlighted. So what was it?  That non-ringfenced departmental budgets would remain “pretty much flat” rather than receiving significant, if not sufficient, cuts.  As Fraser demonstrated yesterday, there were spending cuts hidden in the Budget   and we’ll see the full extent of those as soon as the IFS processes the numbers later today.  Last time around, after April’s Budget, they calculated cuts of 7 percent across three years.  Thanks to a

Peter Hoskin

Last orders in the last chance saloon?

It’s the set of headlines which Labour must have dreaded after their recent progress in the polls.  The Times: “The axeman dithereth … but the taxman cometh”.  The Guardian: “Darling soaks the rich … and the rest of us too”.  The Mail: “The Buck Passer’s Budget”.  And so on and so on.  It doesn’t look too good inside the papers either.  The FT rails against a  “lack of clarity on public spending plans”, while the Independent says that “rarely has a pre-Budget report promised so much and delivered so little”.  The Sun’s opposition may not be too surprising, but it’s there in bucketfuls: “Britain is staring into the abyss. After

Wednesday

James Forsyth

The Tories should attack the national insurance increase

After a tricky few weeks for the Tories, the PBR has come of a bit of a relief for them. It is generating far more bad headlines for the government than good ones.  The Standard’s splash on the national insurance hike is a taste of what the coverage is going to be like for Labour tomorrow. One point the Tories should be hammering home is that the national insurance hike is a far more significant tax rise than the tax on bank bonuses. The one-off tax on banks that pay sizable bonuses will only raise £550 million while in 2010-11 the various national insurance changes will cost taxpayers more than

Peter Hoskin

Bad news for the country, bad news for Labour

Abandon hope all ye who enter here.  While we mostly knew what to expect from Darling’s PBR, it’s still surprising just how uninspiring, how thin and how insufficient it is in the flesh.  It’s pretty much a bad news budget for anyone you could mention.  Bad news, of course, for the bankers who will be hit by the hazily outlined bonus tax.  Bad news for public sector workers, who are already smarting at the frozen pay rise they’ll have to accept in a few years time.  Bad news for anyone who cares about the state of the public finances, which look just as grim, if not worse, as they did

Peter Hoskin

One thing to remember today

As you can probably imagine, plenty of Labour folk are getting excited about the PBR today.  They regard it as a chance for their party to harden their rise in the polls, and hasten the Tories’ descent.  But Danny Finkelstein strikes a necessary note of calm over at Comment Central.  As he puts it, a Budget in which the government has to ‘fess up to the horrible state of the public finances is hardly going to do much good for them.   To Danny’s analysis I’d add one supporting fact: that rarely, if ever, in recent times, has the government received a significant poll bounce on the back of a

James Forsyth

Brown’s bonus smokescreen

If today ends up with the government in a row with the City over plans to tax bank bonus pots with bankers threatening to take the government to court, then it will be mission accomplished for the Labour party. The same goes if we end up in a debate over the merits of a Tobin-style tax. For obvious reasons, Labour would rather talk about anything other than the state of the public finances so anything that distracts attention from that central question is, to use the word of the morning, a bonus for Brown. The Tories know this and will try and turn the debate back to the public finances

Tuesday

Fraser Nelson

Darling carves up the spending pie

It’s the eve of the Pre-Budget Report, and the lunacy has already begun. Tomorrow’s FT says that Darling will copy the Tories’ plans to protect the NHS budget – and throw police and schools in to the protected status as well. This is introduced as “the biggest squeeze in pubic spending for a generation,” with the headline figure of 14 percent cuts. How to make sense of that? My guide: 1. Any sentence that starts “A Labour government would…” can be ignored. Darling can promise to fund free beer for everyone after 2011 – he won’t be in office. These are decoys for the media: the wilder his claims, the

Peter Hoskin

Ringfence-a-rama

Just watching Newsnight, and the show’s economics editor, Paul Mason, has said we can expect several budgets to be ringfenced from spending cuts in tomorrow’s PBR – hospitals, schools and perhaps even the social security budget.  If so, it’s another sign of how political the document is set to be.  Ringfenced budgets are the other side of the soak-the-rich coin: sending out the twin message that Labour will batter the “City fat cats,” while also “investing” in public services “for the many”.  Just a shame that it’s all insufficient to the scale of the debt crisis.

Peter Hoskin

Clocking on

As publicity stunts go, the debt clock the Tories beamed onto Battersea Power Station this evening is quite a decent idea.  Their thinking’s pretty clear – get some coverage in tomorrow’s papers, and increase the likelihood that the horrendous state of the public finances becomes the story of the PBR – but it’s probably no less effective for it.  Anyway, here are some pictures so you can judge for yourself: P.S. Yes, I know it’s out of sync with the Coffee House debt counter. We’re going to update our numbers on the back of tomorrow’s PBR.

David Blackburn

How long until the plug is pulled?<br />

Moody’s AAA sovereign monitor was published today, and whilst the UK’s AAA status remains ‘resilient’ the situation is far from rosy. The report states: ‘The UK economy entered the crisis in a vulnerable position, owing to the (overly) large size of its banking sector and the high level of household indebtedness. Both continue to weigh on economic performance. Net bank lending to the UK business sector has continued to contract through Q3 2009, and repairs to household balance sheets (i.e. the rising savings ratio) may weigh on demand for some time to come. The depth of the crisis has been mirrored by the ongoing deterioration of public finances (with gross

Peter Hoskin

Darling contra Brown, Part 573

Ok, so tomorrow’s Pre-Budget Report is shaping up to be a horrendously political affair.  But, rest assured, it could have been so much worse.  In what is, by now, a familiar Budget-time story, Alistair Darling is fighting the good fight against some of Brown’s most inharmonious fiscal brainwaves.  According to Rachel Sylvester’s column today, here are just some of the measures that the Chancellor has resisted: — A long-term windfall tax on bankers’ bonuses (Darling favours a temporary, one-year tax). — A call to lower the 50p tax threshold from £150,000 to £100,000. — A reversal of the plan to make it easier for couples to pool their inheritance tax

Monday

Peter Hoskin

The Lib Dems’ hunt for an issue may lead them to an Afghan pull-out

As Anthony Wells says over at his UK Polling Report, there are plenty of reasons to doubt whether Labour could convert a third of Lib Dem voters over to their cause.  But the article in today’s Times on Labour’s new strategy will still give Team Clegg pause for thought. The problem for the Lib Dems is that they haven’t yet managed to hit on an attention-grabbing issue to make their own – their favourite, perhaps only, election strategy.  The cause of Parliamentary reform could have done the trick, but – beyond Nick Clegg’s call to prevent MPs from taking their summer holiday – very few of the Lib Dem proposals

Peter Hoskin

This week’s PBR looks set to be Brown’s most political Budget yet

Ok, so all Brown Budgets are political – but signs are that this week’s PBR could be his most blatantly partisan yet.  I mean, just look at his speech this morning on improving efficiency in the public sector.  Some of its measures are welcome – for instance, pledging to cut the pay of senior servants, and the general idea of using technology more effectively in government.  But, as other folk have pointed out (see Guido and Iain Dale), the measures are insufficient to the scale of the debt crisis, and many are old news.  All in all, the signs are as we expected: Brown is paying only lip service to

James Forsyth

The politics of distraction

If everyone concentrates on the actual numbers in the PBR then it will be a disaster for Labour. So, instead Labour will try and distract us all with small but eye-catching measures — a new rate of inheritance tax for estates worth more than £5 million, that kind of thing. The aim will be to move the debate from the grim reality of the country’s fiscal situation to Labour’s dividing lines. There will be a lot of pressure on Cameron and Osborne to denounce Labour’s soak the rich measures. But the most important thing for them to do is to get the debate back to the state of the public

David Blackburn

Cameron and Ashcroft should come clean

David Cameron’s ‘nothing to do with me guv’ response to the Ashcroft tax question on yesterday’s Politics Show has not put the issue to bed. In fact, his obfuscation has the reverse effect. The Independent runs an article today describing how little is known about individuals and authorities. ‘The House of Lords Appointments Commission says that it does not know whether Lord Ashcroft is UK resident. The Cabinet Office and HM Customs and Revenue have declined to answer questions about his status, on grounds of privacy.’ The reality need not be as dodgy as rumour and perception suggest – the reason that there is no official record of Ashcroft’s main residence is that

Sunday

David Blackburn

A tax Blitz that reveals Labour’s mistakes in full

The rumour mill is pulling 24/7 shifts. In recent days, newspapers and newswires have turned into gossip columns devoted exclusively to Alistair Darling’s Pre-Budget Report. If the rumours are true, which is a huge assumption, Darling will not offer the taxpayer a pre-election lolly-pop besides deferring the Age of Austerity until 2011, by which time he will probably be out of office. If Labour’s 1992 manifesto was a tax bombshell, then by all accounts this PBR will be like Dresden. Everyone, both rich and poor, is in the firing line, and there is no space here to analyse every alleged proposal.   Darling looks likely to prolong the VAT cut until at least February,

Fraser Nelson

Brown waits to strike

Things are shaping up nicely for Gordon Brown ahead of the Pre-Budget Report next week. The Tories were 17 points ahead on ICM in October – now it’s 11. Cameron would have a narrow majority on this basis but, given the margin of error, we’re back into hung parliament territory. And this has a self-reinforcing effect on the Tories. A shrinking opinion poll means they tend to get paralysed, avoid arguments, play it safe, wait for Labour to screw up again. As I say in my News of the World column today, the voters who are looking for leadership then don’t really see it. This, of course, softens the Tory

Saturday

David Blackburn

The correct decision but a tactical blunder

The Telegraph reports that Alistair Darling will allow married couples to continue to pool their inheritance tax allowances. Downing Street has pressed the Treasury to abolish pooled allowances in order to demarcate between Labour, the party that promotes fairness, and the Tories, the party that entrenches privilege.   For all the recent polls and bravado, the near-bankrupt Labour party is still fighting an intensive rearguard. If it is avoid annihilation, the party has to hold on in Scotland, Wales and urban Northern England. Darling’s pledge illustrates that there is more than one way to fight a defensive battle. Theoretically, tax free pooled allowances worth up to £600,000 help middle income