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Now the core will come out to vote

Steve Richards

Published 27 March 2000

Appropriately for an ardent football fan, Gordon Brown presented a Budget of two halves. For the first half, he was in his element. "Prudence! Prudence! Prudence! Work! Work! Work!" The Brownite words echoed around the chamber and Brown negotiated the nightmarishly complex text with dazzling ease. This was his territory. This had been his territory since he became shadow chancellor, all those years ago in 1992. Then the chant changed to "Spend! Spend! Spend!" Brown continued to deliver the words with aplomb. Those watching the performance from behind cheered with even greater relish than they had done earlier. The newspapers the following day proclaimed the Chancellor's dominance over the government and regarded the entire performance as another stage in his leadership bid.

But the newspapers got it wrong. That second-half performance had at least as much to do with Tony Blair as it did with Gordon Brown. This was the first Budget that was very much a joint composition. The second half would have been a different performance had Brown written the words alone.

Most of Brown's earlier words related to the three objectives the Chancellor first outlined in an interview with the New Statesman in January 1998: helping people get work, making work pay, and giving more help to those "incapable of work".

It is worth learning those objectives off by heart. One way or another, most of Brown's highly complicated announcements relate to them. They have provided a framework for a whole range of policies from Welfare to Work to free TV licences for some pensioners. Conveniently for Brown, they have provided a coherent backdrop to the government's wider approach to welfare reform, as well. While other ministers were rushing around like headless chickens trying to come up with some solutions on welfare in the government's first year, he effectively became social security secretary.

I was reassured to hear at a Budget breakfast the following morning that both the editor of the Financial Times and the economics editor of Newsnight found most of Brown's tiny changes in the first half of the Budget virtually incomprehensible. But cumulatively they matter. Coercive in tone, influenced by the US, Brown's policies aim to change a welfare state into something closer to a working state.

Brown's approach to work and welfare had been carefully worked out in opposition and consistently applied from day one in government, which is why it has proved so effective. Detailed policies have flowed from the rhetoric. The government's attitude to public spending has been less straightforward. At first, it was at least as tough as the previous government's. Indeed, in the 1997 campaign, Blair and Brown decided not to reveal a plan to invest some additional money in schools and hospitals immediately after the election. They feared a "tax bombshell" would land on them and blow them apart. Now voters are crying out for additional resources.

This is partly a tribute to the duo's political skill. They have transformed the debate over spending. The Chancellor is trusted to spend the taxpayers' money, and even the Daily Mail is calling on him to do so (while demanding big tax cuts as well). I predict, by the way, that Blair and Brown will deploy the same technique over the euro. They will not hold a referendum until voters are crying out to join. They may even wait until the Daily Mail joins in the chorus.

But the public's trust over spending has been bought at a price. For three years, voters have noticed little difference in the quality of public services. This brings us to Blair's contribution to the Budget. For some time now, Downing Street insiders have been saying that a key goal is to reform the public services to such an extent that the middle classes feel entirely happy to use them. There is much at stake here. If there is a mass desertion of state schools and NHS hospitals, the middle classes will increasingly resent paying taxes for services they no longer use. Downing Street recognises now that more cash was required to accompany reforms. There was, I am told, a big smile on the face of David Miliband, the head of the Prime Minister's Policy Unit, on the evening of the Budget.

This does not mean that Blair has become an advocate of high taxes, or that he is willing to take on the argument that better services require higher taxes, which is one of the reasons why the emphasis on improved public services is a political risk. Neither Blair nor Brown believes polls which suggest that voters are willing to pay more tax for improved services. I suspect they are right.

Blair's arguments to justify the rise in the tax burden, admitted by Alastair Campbell, were extremely revealing. He did not say: "If voters want better schools and hospitals, they will have to pay for them. Rejoice! We've put the tax burden up to pay for more nurses." Instead, he stressed that the government was forced to increase the burden in its early years to reduce borrowing. There is some truth in this. But, significantly, it was the argument deployed by Margaret Thatcher, again with some justification, to explain why the tax burden soared in her early years. In other words, the presentation of the argument over tax has still not moved on greatly since 1979.

Much more significant, as I suggested last week, has been Blair's determination to get a grip on public services, including an increase in resources. The tensions with Brown in recent months (ever since Lord Winston's famous interview in the NS last January) have been broadly linked to tactics. How much additional money should the government announce now? How much detail should be delayed

until the summer, when the Comprehensive Spending Review was scheduled? Brown likes to spread announcements around the year (his green budgets in the autumn are effectively mid-year mini-Budgets). Blair wanted to act now.

His decision to take personal command of the NHS may be risky, but he is right to do it.

Frustrated by the stifling bureaucracy in Whitehall and the public sector (he bears the scars on his back), he knows that prime-ministerial authority makes thing happen more quickly.

The Social Exclusion Unit has benefited enormously from Blair's own direct involvement. His high-profile involvement - meeting NHS leaders on the evening of the Budget, his Commons statement the following day - is more than just a symbolic gimmick. It is about making the hopeless bureaucrats deliver.

The same frustration reflects the decision to hand over cash directly to schools. On one level, this reinforces the government's centralist tendency, so much at odds with its pluralist rhetoric. It bypasses local councils as ruthlessly as Thatcher ever did. But delivery matters now, when there is so much evidence that public services remain appallingly inadequate.

Fortunately for Blair and Brown, William Hague has played into their hands as they start to spend some big money, three years after being too scared to promise any at all. Indeed, politically it is sensible for them to spend more and more on education and health, as this will make it increasingly difficult for Hague to explain how he will pay for his tax guarantee. Hague has declared "unambiguously" that he backs the spending increases in these areas.

As Brown has succeeded in trimming the increases in social security through his three objectives ( the ones I mentioned earlier, which you should have learnt off by heart), the Conservatives' detailed spending proposals are eagerly awaited.

It is late on in the first term for Blair and Brown to be getting to grips with the public services. Transport remains a shambles, while the NHS should have got more much earlier. But Hague's tax guarantee means that the dividing lines at the next election will be much clearer than they were at the last.

The core vote will not stay at home.

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