April is going to be quite a month for Gordon Brown. It really will be a make or break time for the prime minister and his government. The budget on 22 April has been timed to follow the G20 summit of world leaders to be held in London at the beginning of the month. The plan is clear. It is for these two events to provide the foundation for a Labour victory at the general election.
Contrary to conventional wisdom – and the opinion polls – I do not believe that the coming election has been won by the Conservatives, I believe that Labour under Gordon Brown’s leadership can still win. As time goes by it is becoming increasingly clear that David Cameron has not closed the deal with the electorate. In many respects the contest has not yet begun but April will change that.
This is why the G20 summit and the budget are so important. These two events must be successful in answering the most pressing questions about the economy but also in delivering politically for Gordon Brown.
To do this, two things need to be achieved. First, both events need to reflect the concerns that people have about the world in which they live and then shape and determine policies that are relevant and understandable.
Second, there needs to be a clear articulation of where Labour wants to take our country in the future, with a clear statement about the values and priorities that underpin Gordon Brown’s leadership and how in practical terms they are to be made real.
To achieve these twin objectives will not be easy. The difficulty that is now emerging in relation to the G20 is that it is simply too ambitious. An exhaustive agenda has been put forward that tries to do too much.
Of course there will be a time when we have to consider how we redraw and construct a new international system of financial regulation; promote greater transparency; tackle the abuse of tax havens and support good corporate governance. The question has to be asked as to whether the time to consider these important issues is now.
Surely it must be the case that at the present moment all effort and attention needs to be focussed on the immediate and urgent necessity to rescue the global economy and get the world’s trading systems operating once again.
The political danger for Gordon Brown at the G20 summit is that in order to secure a consensus he will have to pander to the lowest common denominator. So instead of the outcome being an agreement which lays down a positive and practical agenda for action which tackles the immediate problems, we end up with a set of high-minded declarations and vague re-assurances that appear largely irrelevant to the concerns of the average voter.
Success at the G20 is crucial because it will provide the framework for the budget – the most difficult since Labour came to office in 1997. This budget needs to do many things. Perhaps above everything else it needs to demonstrate that Labour is governing, and not just surviving, in office. It must demonstrate that there is fresh thinking and new ideas.
The challenge will be to identify measures that effectively tackle the recession by providing a stimulus to the economy while at the same time being popular with the voters. Even in these difficult times the budget needs to show that Labour has more to offer in the future than we have already delivered.
This means that it will need to focus on a few key proposals that really matter to people and that will make a difference. They will need to be dramatic in both their scale and boldness if we are to see a change in public opinion and perception towards the Labour party under Gordon Brown’s leadership.
So what does this mean in practice? We know that the great success of Labour under Tony Blair in the last three elections has come about because there has been a coalition of support that crosses geographical and class boundaries, although it has to be recognised that it was showing clear signs of cracking by the time of the 2005 election.
Some now argue that Labour should concentrate on its core, traditional supporters. Others claim that it is the floating voter who aspires to better things that should be the focus of attention. The reality in our political system is that in order to win both groups need to see Labour as the party that speaks to their concerns, needs and ambitions. It is for the budget to clearly demonstrate that it does.
How can this be achieved? At the moment we don’t know if the April budget will contain a further financial stimulus for the economy. Let us assume that Alistair Darling is operating within the spending levels already laid down. Within these constraints the challenge must be to identify changes that would alter the political climate. What could they be? Let us consider one possibility.
I supported the V.A.T. cut in December. It was exactly the right thing to do at the time and it has been supported by many independent commentators since. However, I do now question whether it has run its course both in terms of its overall benefit to the economy and in relation to the political return that comes to the government.
The 2.5 per cent cut in V.A.T. may appear modest but it comes at significant cost. On its own figures it will cost the Treasury £8.6 bn between April and the end of the year. For this amount personal allowances for income tax purposes in 2009-10 could be raised by £1,520 to £7,995. This would bring significant benefits to all income taxpayers but perhaps most importantly it would take 1.7 million low paid workers out of paying income tax altogether.
In my opinion this is exactly the kind of policy that would put Labour on the right side of the debate about a fair tax system and is of the scale necessary to change the political landscape and have the broad, popular appeal necessary to bring back together that coalition of support necessary to secure a Labour victory.
Already damaged beyond repair, sorry. Better luck with the next one.
Mr Byers has his head in the clouds as do all the NuLabour brigade. The VAT cut was a stupid move designed to please the public. It made no difference to public spending because Greedy Gordon has already taxed it to the hilt. Get it into your heads Labour. There is no money! Unless of course, you are a politician.
The VAT cut was not “exactly the right thing to do at the time”: it achieved nothing and cost a great deal. If the Labour government had any real world or business experience (instead of ministers following the usual student-activist-researcher-MP route), then they might have come up with something that made a difference, rather than an easy headline. Like doing something about business rates, for example.
It is always amusing to hear Byers pontificating like this. The truth is he was a laughing stock when he held a cabinet post. Now he sounds like someone with delusions of grandeur, giving us the benefit of of his great wisdom, as if people took him seriously. Perhaps he should book an appointment with Derek Draper. I hear that he is well qualified to advise on this sort of condition.
Unfortunately Mr. Byers, your reputation precedes you.
If you were to wish me a good morning, I would be obliged to check my watch.
Steven Byers is right… The government made a mistake in doing away with the 10% tax. The vat decrease was the govenment “doing something”. Now is the time to return vat to previous levels which everyone pays at the same rate and look after low income earners by raising the tax threashold.
Mark Ellen is nearest the (sorry!) mark. Abolition of the 10% tax band was SYMPTOMATIC, and the analysis of the syndrome has not yet begun. The best was a series of embarrassed excuses, themselves symptomatic of a fatuous blend of technocracy and bureaucracy (oh, we didn’t think..!). Blair(ites) and Brown(ites) alike despise anyone who is not middle class, and so do their acolytes – sometimes with a dash of condescension, or as with Blears, some genuinely colonialist and national-socialist demagogy. Byers himself did not a bad job of trying to renationalise Railtrack in a relatively unobtrusive way, and Jo Moore/Sir Richard Mottram should not drag him down. Perhaps he is the best of a bad bunch. Unfortunately the ‘left’ are either stupid (Meacher, MacDonnell etc) or silly/clever (Livingstone, especially on ‘abolish packaging, the environment will come back to us’ – sEe Vaclav Klaus on this train of thought), or, come to think of it, both (Cruddas, who is a researcher looking for a working class he likes). some of the best Labour were Shirley Williams (comprehensiveised education, or started to), David Owen (prevented a Falklands war) and Vincent Cable….BUT EVEN HE DARE NOT CRITICIZE FRACTIONAL RESERVE BANKING; while they don’t, ‘terrorist Prof Chris Knight’, Ben Bernanke, the brick-throwers of Goodwin’s mansion,Alasdair Darling (he really is as stupid as he looks and sounds – remember Blackpool conference of the LP in ca 1994?) and the rest don’t differ. Put each high street under the owenreshipo and control of the workers there, and let thembuild up a banking system from the bottom upwards.
Labour has forgotten us its core members,and in a way they are right,for we could never support the Tories.But now is the time to go for Socialism-nationalise the banks, the car plants,take over whatever is in trouble and make them pay-let us go back to full bloodede socialism which brought us into the Labour party in the first place to make this country a compassionate society.Who will do this for us the socialists?
william cobbett has taken a bit of a rural ride in his recommendation: surely he means: “put each High Street retail banking outlet under the control of the workers there”. this would make them more like building societies, which in spite of the problems with Dunfermline BS (sounds very large with the £3bn assets – was it demutualized?) have mainly weathered the storm far better than the banks. and the more genuinely mutual and grass roots they have remained, the better they have stood the test. RBS IS nationalised – would Sir Humphrey or Sir Richard (sorry, Motters and Cobbett) on the Board imporve things…..? It was not small local banks that were a tthe basis of failure in the US in 1929…. It was the Fed’s inflationary policy, which operates through fractional reserve banking. He also omits a lot of other inflationists, such as Ken Clarke, Geore Osborne, King……
We had the party, now we have the hangover (sorry to quote Eamon Butler, but he was right. btw, Karl Marx was a hard money man, not a Keynesian at all – if that helps the socialists amongst us; and there is no evidenced he believed in Old-Labour-style nationalisation either…..