Forget the hype – Osborne’s Budget is an irrelevance

Expect no surprises tomorrow. In fact, the economic die has already been cast.

Tomorrow is the Budget, one of the great set-piece events of the Westminster calendar. A moment when governments rise and fall, and careers are made or destroyed.

Not this year. Forget the hype, diluted though it has been by events in Libya and Japan. Politically at least, George Osborne's speech is an irrelevance.

He could surprise us. Take the opportunity offered by Ed Balls to apologise for the grievous damage already wrought to the British economy on his watch and beg forgiveness. "The Chancellor stunned the House of Commons today when he concluded his Budget address by collapsing weeping over the despatch box and imploring the opposition benches, 'Pardon us, pardon us, we were wrong, so very, very wrong.' "

I doubt it. Osborne is not Cameron. While the Prime Minister's instincts are to scurry away from the sound of gunfire, his Chancellor is made of sterner stuff. He is perfectly content to court short-term unpopularity in pursuit of what he regards as long-term political gain. The axe is falling. Nothing will stay his hand.

There will be the odd populist nugget thrown out to placate the discontented mob. Fuel duty will be frozen. Possible taxes on air passenger duty.

There was also some briefing in the Sunday papers about training and measures to tackle youth unemployment.

But this is mere window-dressing. Deficit reduction, hard and fast, is the government's stated policy. Tomorrow will be a reaffirmation of that, not a repudiation.

There is obviously something personal at stake for the protagonists. This is Osborne's first proper Budget and Ed Balls's first Budget response. But these are two seasoned performers. Neither is going to make a major gaffe. Neither will allow the other a major opening. The immovable deficit reducer will meet the irresistible fiscal stimulator. They will both retire with honours even.

Indeed, both meet tomorrow more secure in their position than their respective principles. David Cameron and Ed Miliband are still the subject of muttering from their respective back benches. Osborne is regarded by disgruntled Tories as the man who puts the lead in the government's pencil. Ed Balls is the person who brings stature to a still inexperienced leadership team.

Ready for a change of heart?

That's not to say the economic battleground on which they will take up arms is irrelevant. Quite the opposite. The economy is the issue that will define our politics between now and the general election. But tomorrow is a sideshow.

Far more significant will be the release of the next set of growth figures. If they show the economy has indeed slipped into recession, then all bets are off. Labour's general critique of the government's strategy – and Ed Balls's specific attack on the pace and scale of deficit reduction – would be vindicated at a stroke. In that instance, Labour is back in the game.

If, on the other hand, the economy rebounds and the wrong kind of snow is seen as being responsible for last quarter's downturn, then it is Osborne who will feel vindicated. He will portray himself as the man who kept his head while those about him on the opposition benches were losing theirs. The mantra of tough decisions, courageously enforced, will echo once more.

There are no certainties. The public backlash against the Osborne austerity package could prove overwhelming. Losses in the local elections could enforce a change of a heart.

It could equally be the case that an economic downturn focuses public attention even more firmly on the reasons behind our economic collapse. The opinion polls asking who people most blame for the deficit and attendant economic hardship make stubbornly sombre reading for Labour.

Whatever the answers to these questions, they will not be found tomorrow. Though it provides political theatre, the Budget in truth rarely proves to be a political game-changer, especially so early in the parliament.

Even at the end of the parliamentary cycle, budgets rarely change the political narrative. Kenneth Clarke's refusal to offer profligate tax cuts in his last budget before the Tories' 1997 defeat was because he knew that whatever he flourished from his battered old box, the game was up. Last year, Alistair Darling tried manfully but singularly failed to convince the nation that the economy remained safe in Labour's hands.

The fact is that the economic die has been cast. Cameron and Osborne have made their choice. They have one policy: deficit reduction. For them, there is no alternative. They will live or perish by its outcome.

The rest, tomorrow included, is just gossip.

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Everyone's forgotten the one issue that united the Labour party

There was a time when Ed Miliband spoke at Momentum rallies.

To label the row over the EU at Thursday’s Labour leadership hustings "fireworks" would be to endow it with more beauty than it deserves. Owen Smith’s dogged condemnation of John McDonnell’s absence from a Remain rally – only for Corbyn to point out that his absence was for medical reasons – ought to go down as a cringing new low point in the campaign. 

Not so long ago, we were all friends. In the course of the EU referendum, almost all of the protagonists in the current debacle spoke alongside each other and praised one another’s efforts. At a local level, party activists of all stripes joined forces. Two days before polling day, Momentum activists helped organise an impromptu rally. Ed Miliband was the headline speaker, and was cheered on. 

If you take the simple version of the debate, Labour’s schism on the EU appears as an aberration of the usual dynamics of left and right in the party. Labour's left is supposedly cheering a position which avoids advocating what it believes in (Remain), because it would lose votes. Meanwhile, the right claims to be dying in a ditch for its principles - no matter what the consequences for Labour’s support in Leave-voting heartlands.

Smith wants to oppose Brexit, even after the vote, on the basis of using every available procedural mechanism. He would whip MPs against the invocation of Article 50, refuse to implement it in government, and run on a manifesto of staying in the EU. For the die-hard Europhiles on the left – and I count myself among these, having run the Another Europe is Possible campaign during the referendum – there ought to be no contest as to who to support. On a result that is so damaging to people’s lives and so rooted in prejudice, how could we ever accept that there is such a thing as a "final word"? 

And yet, on the basic principles that lie behind a progressive version of EU membership, such as freedom of movement, Smith seems to contradict himself. Right at the outset of the Labour leadership, Smith took to Newsnight to express his view – typical of many politicians moulded in the era of New Labour – that Labour needed to “listen” to the views Leave voters by simply adopting them, regardless of whether or not they were right. There were, he said, “too many” immigrants in some parts of the country. 

Unlike Smith, Corbyn has not made his post-Brexit policy a headline feature of the campaign, and it is less widely understood. But it is clear, via the five "red lines" outlined by John McDonnell at the end of June:

  1. full access to the single market
  2. membership of the European investment bank
  3. access to trading rights for financial services sector
  4. full residency rights for all EU nationals in the UK and all UK nationals in the EU, and
  5. the enshrinement of EU protections for workers. 

Without these five conditions being met, Labour would presumably not support the invocation of Article 50. So if, as seems likely, a Conservative government would never meet these five conditions, would there be any real difference in how a Corbyn leadership would handle the situation? 

The fight over the legacy of the referendum is theatrical at times. The mutual mistrust last week played out on the stage in front of a mass televised audience. Some Corbyn supporters jeered Smith as he made the case for another referendum. Smith accused Corbyn of not even voting for Remain, and wouldn’t let it go. But, deep down, the division is really about a difference of emphasis. 

It speaks to a deeper truth about the future of Britain in Europe. During the referendum, the establishment case for Remain floundered because it refused to make the case that unemployment and declining public services were the result of austerity, not immigrants. Being spearheaded by Conservatives, it couldn’t. It fell to the left to offer the ideological counter attack that was needed – and we failed to reach enough people. 

As a result, what we got was a popular mandate for petty racism and a potentially long-term shift to the right in British politics, endangering a whole raft of workplace and legal protections along the way. Now that it has happened, anyone who really hopes to overcome either Brexit, or the meaning of Brexit, has to address the core attitudes and debates at their root. Then as now, it is only clear left-wing ideas – free from any attempt to triangulate towards anti-migrant sentiment– that can have any hope of success. 

The real dividing lines in Labour are not about the EU. If they were, the Eurosceptic Frank Field would not be backing Smith. For all that it may be convenient to deny it, Europe was once, briefly, the issue that united the Labour Party. One day, the issues at stake in the referendum may do so again – but only if Labour consolidates itself around a strategy for convincing people of ideas, rather than simply reaching for procedural levers.