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.

Now give Sergeant a proper job

Ex political hack John Sergeant has doubtless provided the nation with much entertainment during his stint on Strictly Come Dancing, and his parting shot at those who persisted in taking the wretched programme far too seriously was as graceful as his dancing was grace-less, but perhaps the BBC should take this opportunity to give him a proper job.

Two possibilities spring to mind. He has been by far the best of the numerous temporary presenters used by Have I Got News For You since the demise of Angus Deayton, and his appointment as the permanent replacement could restore the show to its former glories. Alternatively, he could take over Question Time, which is badly in need of someone of Sergeant's political nous after more than a decade of Dimblebore.

Two cheers for pirouetting Purnell

The government was as all over the place over the post office contract as it was over Baby P - but at least they got there in the end. Here's today's Journal column.

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It is easy to become cynical about politicians, especially when you've been following their activities for as long as I have. But just occasionally, they can surprise us all and do something right.

It is true they hardly covered themselves with glory this week over the Baby P tragedy, although I'm not sure which of Gordon Brown or David Cameron was more culpable in that regard.

The Tories have spent most of the week trying to blame Mr Brown for allegedly trying to turn the case into a "party political issue," with the implicit suggestion that he doesn't care about the dead child.

For my part, I think if Mr Cameron was so keen to take a non-partisan approach to the issue, he could have chosen a less highly-charged arena in which to raise it than Prime Minister's Questions.

But to be fair to our Westminster masters, they partially redeemed themselves with the announcement of a lifeline to 3,000 post offices under threat of closure, on top of the 2,500 which are already due to close by the end of the year.

For some years, it has been apparent that wherever this government's priorities lay, they certainly did not lie with preserving essential services to isolated or rural communities.

I could list numerous examples of this from the gradual demise of village schools to the trend towards distant super-hospitals, but its apparent willingness to allow village post offices to go to the wall is perhaps the most emblematic.

Which is why Work and Pensions Secretary James Purnell's decision on Thursday was as unexpected as it was welcome.

Ministers have decided that the £200m-a-year contract to handle benefit and pension payments - known as the Post Office Card Account - will not after all be handed over to a private sector provider.

Instead, the Post Office will continue to run the card account which distributes benefits to 4.3 million claimants.

Mr Purnell told MPs he would do "nothing to put the network at risk" and that the contract was "central to the viability of the network."

It guarantees the contract until at least March 2015 with what Mr Purnell called "the possibility of an extension beyond that".

Perhaps one of the reasons the announcement caught my eye was because, a few months back, I wrote in this column that "real Labour governments don't close local post offices."

In the light of this, it would be nice to view the decision as further evidence that Mr Brown's administration is rediscovering some sense of moral purpose, though the truth may be more prosaic.

Almost certainly, it had more to do with the impact of the financial crisis and the need to ensure that the people's money is handled by a trusted organisation.

Mr Purnell himself hinted at this in his statement, saying: "The circumstances have changed because of the current financial situation. It means that people are even more reliant on the Post Office than before."

The Tories are certainly in no doubt. Shadow Business Secretary Alan Duncan called the contract announcement "a humiliating climbdown for the government, who have done everything they possibly can to find a way of awarding it to somebody else."

There is possibly something in that, given Mr Purnell's own performance in a Lib Dem-inspired Commons debate last Monday.

The Work and Pensions Secretary insisted there would be "due process" in relation to the award of the contract, and Labour MPs duly trooped through the lobbies to defeat a Lib Dem call for the tendering process to be abandoned.

Yet 72 hours later he was back in the Commons announcing that he done precisely that, prompting one commentator to call it the "Purnell Pirouette."

If the truth be told, the government has been a bit all over the place on the issue

It was a not dissimilar story with Baby P, with the initial refusal to hold an inquiry into Haringey Council's handling of the case swiftly reversed by Children's Secretary Ed Balls.

All in all, it is hard to disagree with the verdict of the Lib Dems' work and pensions spokeswoman Jenny Willott.

"This could all have been avoided if, as the Liberal Democrats have long argued, the Post Office Card Account had never been put out to tender in the first place," she said.

But if the U-turn was, in any sense, a nod to traditional Labour values, it was ironic to see former Hartlepool MP Peter Mandelson taking a key hand in it.

He of course is the man who has been most closely associated with trying to get the Labour Party to behave more like the Tories in their general attitude to the private sector.

Yet Mr Mandelson - or someone acting on his behalf - had clearly briefed the Sunday papers last weekend that there might be some good news in the offing for the Post Office this week.

The Prince of Darkness has certainly not lost his eye for a good headline in his time away from UK domestic politics.

But in the final analysis, the point is that no matter how we got here, the right result has, for once, been achieved.

People in rural Northumberland whose post offices may now remain open where once they faced closure will not worry too much about the motives behind the government’s change of heart.

Whether it was a case of principle or pragmatism, what's important is that a vital social service is now set to be preserved, at least in some areas.

Surely our political leaders deserve at least two cheers for that?