The politics and the economics are inextricably intertwined

Opposition criticisms of the Pre-Budget Report as "electioneering" are fatuous and naive. Government denials that it is such are evn more so. Here's today's Journal column.

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Over the past couple of years, the Liberal Democrat Treasury spokesman Vince Cable has proved himself to be one of the most prescient, as well as one of the most popular politicians in the country.

It was he who first predicted the banking crisis, he who first advocated the nationalisation of Northern Rock – and he who told Gordon Brown he had gone “from Stalin to Mr Bean.”

Yet for all his undoubted expertise in economic matters, his criticisms of the pre-Budget Report unveiled by Chancellor Alistair Darling on Wednesday came over as rather naive and facile.

He charged Mr Darling with the grave offence of having unveiled “an election manifesto” rather than a national economic plan – scarcely surprising given that there is, er, an election happening in six months’ time.

Much of the debate over the PBR has thus far revolved around this point, with claims that Mr Brown overruled Treasury plans for faster action to reduce the country’s £178bn budget deficit.

The central accusation against the Prime Minister here is that he is allowing the politics of the situation to dictate the economics – and in so doing, putting the future economic health of the country at risk.

But although governments of both colour have certainly been guilty of that in relation to pre-election budgets in the past, I am not sure the two can so easily be disentangled in this instance.

To my mind, the differences between the parties are as much about the fact that Mr Brown has a genuinely different view from his opponents over how to tackle the recession, as they are about electoral politics.

For several months now, the main point at issue between the two main parties has been not whether spending cuts need to be made, but whether they should be made in 2010 or 2011.

In this sense, the PBR changed absolutely nothing. It merely made these already well-established dividing lines a little clearer.

Neither are those dividing lines in themselves anything new, being merely a modern-day re-run of the economic debates that have recurred since the original Great Depression of the 1930s.

There will always be those like Mr Brown who believe that increasing spending is the best way out of a recession, and those like Tory leader David Cameron who believe that simply makes a bad situation worse.

Hence, if the Prime Minister has his way, the cuts will come only once the economy has started growing again – as it is projected to do by 1.5pc next year and by 3.5pc in 2011.

As well as spending cuts, the fiscal tightening from 2011 onwards will also see a 1pc rise in National Insurance and a 1pc cap on public sector pay settlements.

This was reasonably smart politics by Mr Darling as it means an incoming Tory government is now committed either to carrying out a tax increase, or having to explain why they are making even deeper cuts.

He also scrapped his earlier proposal to increase inheritance tax thresholds, thereby challenging the Tories to axe their own controversial plan to raise it to £1m.

But if Mr Cable’s accusation of electioneering against the Chancellor was somewhat fatuous, Mr Darling’s denial of the charge was possibly even more so.

Indeed, it was about as disingenuous as Mr Brown’s claim to have cancelled the autumn 2007 election in order to “set out his vision” rather than because of a couple of adverse opinion polls.

The truth is, this PBR was designed to convey a very blunt message to the voters: “Things are bad, but they would be a damned sight worse with the other lot in charge.”

It may not be the most inspiring of election pitches, but as Labour discovered to its cost in 1992, it’s one that has often proved successful.

Was the 'election-that-never-was' actually the political judgement call of the century?

Sorry Jack, but you were right all along. Gordon Brown made the right call not to hold an election in autumn 2007 - and if all the recent chatter about hung Parliaments proves to be correct, he will ultimately be vindicated in it. Here's today's Journal column.

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Amidst all the many and varied factors that have contributed to the unpopularity of Gordon Brown’s government over the past couple of years, one stands out above all others.

It came, of course, in October 2007, a little over three months into his premiership, when Mr Brown decided not to call the snap general election for which some of his closest allies had been actively preparing.

From being 11 points ahead in the opinion polls during his party’s conference a fortnight earlier, Labour suddenly found itself up to 20 points behind, a reversal in fortune from which the government has never quite recovered.

As such, it seems likely to be remembered as the decisive moment when Mr Brown lost it - lost the respect of the British public, lost the political initiative to the Tories, and lost any chance of securing his own personal mandate.

At the time, I was one of those who argued that holding an opportunist election when there was no need to do so risked destroying Mr Brown's hitherto highly-prized reputation as a serious statesman.

I was by no means alone in this. Another who urged restraint was the Justice Secretary Jack Straw, one of only three men to have served continually in the Labour Cabinet since 1997.

Yet with the benefit of hindsight Mr Straw has now changed his mind, saying this week that he was wrong and that the Prime Minister should have called that autumn '07 contest.

For my part, I am still not convinced. The public do not like unnecessary elections – especially in November – and I still reckon the best Mr Brown would have ended up with was a hung Parliament.

There has been little talk of hung Parliaments since then, but it has suddenly revived over the past week, thanks largely to a - possibly rogue - opinion poll showing the Tory lead down to just six percentage points.

As regular readers of this column will know by now, our skewed electoral system means the Tories have to be 10-11 points ahead of Labour to be sure of securing an outright Commons majority.

And lo and behold, alongside talk of a hung Parliament comes fresh talk about proportional representation, with Labour confirming it will pass legislation before the election to enable a referendum on the voting system to be held after it.

It’s a smart tactical move by Mr Brown, as it means an incoming David Cameron government will have to repeal the legislation to stop the referendum taking place – unlikely if the Tories end up dependent on Lib Dem support.

That Mr Cameron is facing the distinct possibility on having to rely on Nick Clegg to put him in No 10 is seen by many as proof that he and his party have yet to "seal the deal" with the electorate.

If he is to become Prime Minister, it seems to likely to be more a result of Labour's ineptitude and lack of fresh vision than out of any great public enthusiasm for the Conservatives.

But what is also interesting about the recent chatter is that it puts a slightly new perspective on Mr Brown's October 2007 decision not to go to the country.

Had he done so, and gone from a majority of 66 to a hung Parliament, it would have gone down in history as a terrible misjudgement.

But were he to secure one in 2010, in the teeth of the worst recession for seventy years and up against a moderate, likeable Tory opponent, it would not look anything like that.

Is it just possible that ‘bottler Brown's' great election choke could yet come to be seen as the political judgement call of the century?

Less popular than Van Rompuy

Most opinion polls tend to tell you what you already know, and to reinforce the "received wisdom" about politics and politicians. But I have to admit to being startled by one of the findings in the PoliticsHome poll on the European presidency released this afternoon.

In my own personal view, the whole appointments procedure has been a complete fiasco and we have ended up, in Herman Van Rompuy and Cathy Ashton, with a pair of complete political pygmies in the EU's two most senior roles.

Yet that is not entirely how the wider public sees it, apparently. While agreeing that the process has been undemocratic, most people are relieved that a low-profile figure such as Van Rompuy has taken the presidential job rather than a "traffic stopper" such as Tony Blair.

According to PH: "61% believe that Van Rompuy is preferable to Tony Blair as president." Isn't that just a spectacular measure of the obloquy into which the three-times election victor has now sunk?