No more the bottler

VAT down from 17.5pc to 15pc. New higher tax band for the super-rich. £3bn of capital spending brought forward. National insurance to go up after the election. New air taxes on long-haul. Increases in pensions and child benefit brought forward. Whatever you make of today's Pre Budget Report, no-one can say it lacks ambition.

The Prime Minister has been called many things over the past fifteen months - but the soubriquet which possibly did him the most damage was the one applied to him in the wake of the decision to postpone a 2007 election - 'Bottler Brown.'

Well, I never believed Gordon Brown was a bottler, and this package today has proved it. He is, and always has been when it comes to the economy, a man of huge political courage.

Not the least courageous bit of it is that Mr Brown is attempting to turn the normal laws of politics on their head by promising tax increases if his party wins the next election, gambling that this will partly help defuse the inevitable Tory claims of a hidden "Labour tax bombshell."

Will it pay-off? Well, if I knew that, I'd be sitting in his chair. It doesn't help the government's case that it is borrowing huge sums of money in the hope of things turning out okay to address a problem caused by banks borrowing huge sums of money in the hope of things turning out okay.

But even if Brown goes on to lose in 2010, and the apparent rebirth of Keynesian economics after decades of monetarist orthodoxy turns out to no more than a fleeting glimmer, I think he's done the right thing by Britain and its neediest families today. Maybe history, if not the electorate, will give him credit for it.

Politics returns to normal

The age of political cross-dressing came to an end this week as David Cameron tore up his pledge to match Labour's spending plans. Here's today's Journal column.

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Ever since David Cameron became Tory leader nearly three years ago, the shape of British politics has been fixed in a fairly rigid mould.

A Labour Party which had already shifted several degrees to the right under Tony Blair found itself confronted by a Conservative Party suddenly seeking to "detoxify" itself by shifting to the left.

The upshot was what I termed the era of political cross-dressing - an increasingly desperate fight over the political centre ground in which policies drawn up by one party were swiftly and routinely purloined by the other.

Even when Gordon Brown took over the Labour leadership in 2007, he found himself unable to do much to break out of this straitjacket, for fear of ceding vital territory to the opposition.

And there we might have stayed right up until the next election, but for the credit crunch and the ensuing economic recessson that now seemingly grips the UK.

Suddenly, things became politically possible that would once have been quite beyond the pale - nationalisation of the banks being perhaps the foremost example.

Against the odds, the one-time high-priest of "prudence" re-discovered Keynesian economics and tore up his own much-vaunted "fiscal rules" which had previously imposed a strict limit on borrowing.

Suddenly, the Tories found themselves having to rethink their own approach to economic policy, for fear of finding themselves outflanked by Labour on both tax cuts and spending increases.

The result was that, this week, the era of political cross-dressing finally came to an abrupt end, as Mr Cameron announced his party would no longer match Labour's spending plans.

In a keynote speech on the economy, the Conservative leader insisted increased borrowing today would mean higher taxes tomorrow as he ripped up his spending pledge.

"Gordon Brown knows that borrowing today means higher taxes tomorrow and if he doesn't tell you that he's misleading you," he said.

"And in any case, after 11 years of waste and broken promises from Labour, they can see that spending more and more alone does not guarantee that things get better."

In one sense, it takes politics back to where it was before the 1997, 2001 and 2005 elections, when the battle-lines were essentially between Labour "investment" and Tory "cuts."

But in truth, in the case of the most recent contest, that was no more than mendacious spin by Labour - as I pointed out on these pages at the time.

The platform on which the Conservatives fought in 2005 was not cutting spending, merely allowing it to rise at a slower rate than had been proposed by Labour

This is essentially the same as what Mr Cameron is now proposing, despite the inevitable Labour taunts that the Tories are reverting to their slash-and-burn, nasty party stereotype.

It's undoubtedly a big gamble by the Tory leader. Ever since Labour pledged not to exceed the Tories' own spending plans prior to 1997, the watchwords in economic policy have been "don't frighten the horses."

To put it another way, the conventional wisdom for the past decade and a half has been that parties which pledge to change things too much - either by big increases or big cuts in spending - risked electoral suicide.

But the real gamble here is not Mr Cameron's, but Mr Brown's, for it is the Prime Minister who is making the biggest departure from economic orthodoxy.

While Mr Cameron is merely promising lower spending increases and no immediate tax cuts, Mr Brown is promising not just higher spending, but tax cuts into the bargain as well.

People often think the era of economic orthodoxy - of not spending more than the country can strictly afford - began with Mrs Thatcher, but it did not.

It actually began with a Labour Prime Minister, Jim Callaghan, who went to his party conference in 1976 to tell them "the party's over."

"We used to think we could spend our way out of a recession. I tell you in all candour that that option no longer exists," he said at the time.

Well here, 32 years on, is his successor-but-five as Labour leader telling us that we can now do exactly that.

We will see on Monday, when Chancellor Alistair Darling unveils his Pre-Budget Report, just how much Mr Brown is prepared to bet on red as he attempts to beat the slump - but all the talk is that it will be big.

Tax credits for the worse off seems a given in the the light of the Prime Minister's recent comments, so too a decision to bring forward spending on major infrastructure projects - which could potentially be good news for the North-East.

If it works, it will go down as possibly the greatest economic rescue operation since Franklin D. Roosevelt's "New Deal" in the wake of the Great Depression of the 1930s.

If it doesn't, Mr Brown will go down as yet another Labour PM who tried and failed to suspend the normal laws of economics.

Westminster is once again rife with talk about a snap general election - even that it could be announced immediately after the PBR on Monday.

I still don't buy it. For a start, the British don't hold elections in the middle of December. Secondly, Brown got his fingers burned so badly last time that I can't believe he would go down that route again.

But what is true is that battle lines for the next election have now started to become clear - with a classic left versus right battle in prospect for perhaps the first time since 1992.

The outcome will almost certainly determine the shape of British politics for the next decade.

Mirrored Lives

Bloggers and the Lobby

After initially taking the view that political bloggers had little to gain, and much to lose in terms of their independence by joining the parliamentary lobby, my thinking has changed on this point over the past couple of years. The gradual convergence of the blogosphere and the mainstream media which I wrote about in the Guide to Political Blogging earlier this year has rendered the old dividing lines obsolete.

As I have pointed out before, what we must now call the Big Five political blogs are, by virtue of their size, influence, and networks, practically part of the mainstream media already. They are, in no particular order, Iain Dale's Diary, Guido Fawkes, Political Betting, Conservative Home and the most recent newcomer to the elite, Liberal Conspiracy. In my view, all should be in the lobby.

I wrote in the 2008 Guide: "I always thought the day political blogging really entered the mainstream would be when one of the big four blogs managed to obtain a lobby pass. If they haven’t yet given one to the new co-editor of Con Home, I have a feeling they soon will do."

This was a reference to Jonathan Isaby, who had just proved my point about convergence by moving from being a Daily Telegraph lobby hack to editing the site which used to be, rather unfairly, known in some circles as Continuity IDS.

But according to this report in a well-known journalism trade publication yesterday, I was apparently premature in my forecast. In a speech at the London School of Economics, lobby chair Ben Brogan said the issue of whether to admit bloggers to the lobby was in fact causing "a huge headache."

Asked by a member of the audience whether the Commons authorities would consider the move, Brogan replied: "They've been very reluctant to start issuing passes to new media outlets. There's an ongoing conversation whether the House of Commons authorities start issuing media passes to bloggers. That remains unresolved."

Now I am all too aware of the limitation on desk space in the Press Gallery, having been involved in the very early planning stages of the refurbishment that eventually took place in summer 2007, but in the era of wireless broadband, bloggers hardly need a permanent desk in the Gallery in order to update their sites. This is essentially an argument about access, not desks.

Ben's comment doesn't make it entirely clear whether it's the lobby or the Serjeant-at-Arms Office - or both - which is resisting the move. But as a blogger himself - and a very fine one in my view - I would hope that Mr Brogan is quietly making the case for reform.