Thursday, April 23, 2009
Was this Budget Labour's 'Black Wednesday?
I couldn't help feeling that yesterday's budget marked a moment when Brown's Labour government finally failed to avoid culpability in the public mind for the economic crisis. This was not because of the tax hike on high earners- that was one of the few good bits for most voters, nor for the various giveaways.
No, firstly, it was for the extra tax on common consumer goods- alcohol, cigarettes petrol and the like. Secondly it was for the tough cut backs in spending which will begin to bite in a year or so. Thirdly it was for the 3.5% reduction in GDP this year and the over optimistic predictions of recovery; does he really think growth will resume by the end of the year? Fourthly it was for the huge scale of government debt which will not be paid off until 2016 or maybe even later. This was not a budget which warmed the heart or won voters over. But it was the best Darling could do in the circumstances and I thought he managed to negotiate these fearful rapids bravely and with great calmness.
A final reason why the recession might well adhere to Brown was the tremendous shellacking he got from Cameron. His attack on the government was a furious, polemical parliamentary triumph. I received the awful impression that a moment has been reached comparable to 16th September 1992: Black Wednesday. This was a day which ruined the Tory reputation for economic competence and handed it over to Labour. Conservative polls flatlined for the next 14 years, until Cameron was elected. I just hope I'm wrong on this but there was a feeling of the ground shifting in the reaction to the budget.
Ironically Labour had been in favour of joining the ERM and were also culpable, if anyone was, for the debacle on that day. There is a similar irony now in that almost certainly the Conservatives would have pursued a similar path to Brown had they been in power and that whe they win the election next year, as they surely will, they will be the party who will inherit the odium and voter anger as they struggle with debt and where to make those hateed public expenditure cuts.
Why not just go to North Korea and get done with it?!
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