All sides are anxious about this Budget

"In this country we have to look upon budget promises as made of the same stuff as lover's oaths." So said Lord Salisbury, three times Conservative PM, and his words are perhaps more apt than ever given that all the love drained out of the coalition's marriage some time ago. We need to sift carefully before being sure about what today really means.

As with all Budgets we should start this process by asking what impact it will have on the overall economy, who wins and loses, and what it will mean for the political strategies of different parties.

In terms of macroeconomics this budget was always going to be a non-event. It is broadly fiscally neutral, with only very minor upward ticks to growth forecasts. None of this is a surprise: this chancellor was always going to ignore those calling for more stimulus. This Budget, like all the others this Parliament, lives in the shadow of the choices made in the emergency Budget in June 2010 and subsequent spending review.

When it comes to the distributional effects, today will leave a mark, though in many ways a smaller one than other recent budgets. Politics between now and the Sunday papers will be all about trying to establish the narrative that sticks about who has won and lost.

Osborne's central claim is that the "bulk" of support on offer will go to low to middle income Britain. Yet it's very clear that 70 per cent of the gains from the hike in personal allowances - the key Budget measure - goes to the top half of the income distribution. The choice he made was to spread a small tax cut thinly to all individuals earning from £8,000 to over £100,000 - though it should be pointed out that, against expectations, the majority of the gains will be restricted to basic rate tax payers. And it's true that the increase in allowances is a less regressive way of cutting taxes than others. But that doesn't make it a good use of limited resources - it could have been better spent reversing the impending swinging cuts to tax credits for low-income working families.

Perhaps the best that can be said is that, unlike its predecessors, in this budget there has been no further assault on low income working families (though Osborne did put down a clear marker for a further £10bn of welfare cuts by 2016, which will make the 2014 spending review a complete quagmire for the Lib Dems) in order to pay for a thinly spread giveaway which disproportionately benefits better off households.

The party politics that result from today are hard to call. It's clear that all sides can claim some grounds for feeling upbeat about what the Budget will mean for them in the short term; yet in private each concedes that it is likely to expose an underlying vulnerability. The Lib Dems made the first move in the budget negotiations and will strongly assert the move to a personal allowance of over £9,000 surpasses expectations, vindicates their open source negotiating strategy, and demonstrates they are achieving results in government. The tax avoidance measures and hike in high end Stamp Duty will help placate their activists even if they remain grumpy about the cheapness with which Clegg conceded the 50p rate.

It certainly is good news for the Lib Dems that in raising the personal allowances they have alighted upon a popular flagship policy that Osborne feels the need to back. The bad news is that it appears to be a policy that isn't doing them any good electorally, which in part reflects the fact that very few voters seem to realise it belongs to them (a view borne out in focus groups). For all Clegg's persistence in talking about it, and despite the entire media class thinking it is very clearly his policy, it seems the public has yet to reach the same view. The risk for Clegg is that the budget makes clear that even when he manages to win, he still loses.

For their part Cameron and Osborne will think they have pulled off satisfying the rightwing of their party whilst binding in the Liberal Democrats, and steering Labour onto the ground of protest about unfairness rather than building up its credentials as an alternative government in waiting.

They will be pleased they have reduced the number affected by their Child Benefit horlicks (even if the price of this is horrendous complexity in the tax system) and have killed off calls for a new property tax in this Parliament - though I suspect right now they are starting to think they may have badly misjudged the reaction on pensioner allowances. And by taking the decision to tackle the 50p issue now in mid-term they will feel they've detonated a potentially explosive problem at a safe distance from the general election.

Yet for all their confidence there is no escaping the central fact that the Conservatives have acted very casually in relation to one of their biggest electoral weaknesses. The decision on the 50p tax is a further nail in the coffin of Cameron's original modernising agenda and it comes hot on the heels of the NHS debacle. However loudly they shout about taxing the rich over the next few days it will still be the case that in a few weeks time no one will recall a single anti-avoidance measure but many will remember the tax cut for the rich at a time when spending cuts for the rest are biting.

As well as affecting its constituent parts, the noisy budget process is likely to have implications for how the coalition works. The frantic nature of the briefing made it feel like a pre-election Budget. Let's not forget there are six more budgets and autumn statements this Parliament that need to be agreed. It's hard to see the politics of each getting much easier, or the Lib Dem desire for differentiation subsiding. That said, part of the intensity of the manoeuvring reflects the depths of the concerns among Liberal Democrat strategists about what they see as their dire prospects in the May elections - Clegg's moment of maximum vulnerability this parliament. If the coalition is to maintain a veneer of smooth functioning it will need to learn a more orderly way of disagreeing.

And what of Labour? Having been largely squeezed out of the pre budget debate by the Coalition's internal wranglings, the decision on 50p now provides them with a clear message which will be delivered with real gusto as Ed Miliband showed today in the Commons - and unlike the autumn statement it's not a message that can be caricatured as being about the desire for a larger deficit. But this will only serve for the short term. The big question the public are asking of Labour is not whether they are committed to tackling unfairness. At the start of the new year Labour chose to open a conversation about how they would govern in tough times. It's since been interrupted by the row about the welfare cap, the coalition's woes on the NHS, and then the Budget. Soon Labour will have to recommence that discussion on how they would govern with scant money, and when they do they'll need to be sure about where they really want to take it.

Don't be fooled by the upbeat assessments. All sides are anxious about where this Budget will take them.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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No, Jeremy Corbyn did not refuse to condemn the IRA. Please stop saying he did

Guys, seriously.

Okay, I’ll bite. Someone’s gotta say it, so really might as well be me:

No, Jeremy Corbyn did not, this weekend, refuse to condemn the IRA. And no, his choice of words was not just “and all other forms of racism” all over again.

Can’t wait to read my mentions after this one.

Let’s take the two contentions there in order. The claim that Corbyn refused to condem the IRA relates to his appearance on Sky’s Sophy Ridge on Sunday programme yesterday. (For those who haven’t had the pleasure, it’s a weekly political programme, hosted by Sophy Ridge and broadcast on a Sunday. Don’t say I never teach you anything.)

Here’s how Sky’s website reported that interview:

 

The first paragraph of that story reads:

Labour leader Jeremy Corbyn has been criticised after he refused five times to directly condemn the IRA in an interview with Sky News.

The funny thing is, though, that the third paragraph of that story is this:

He said: “I condemn all the bombing by both the loyalists and the IRA.”

Apparently Jeremy Corbyn has been so widely criticised for refusing to condemn the IRA that people didn’t notice the bit where he specifically said that he condemned the IRA.

Hasn’t he done this before, though? Corbyn’s inability to say he that opposed anti-semitism without appending “and all other forms of racism” was widely – and, to my mind, rightly – criticised. These were weasel words, people argued: an attempt to deflect from a narrow subject where the hard left has often been in the wrong, to a broader one where it wasn’t.

Well, that pissed me off too: an inability to say simply “I oppose anti-semitism” made it look like he did not really think anti-semitism was that big a problem, an impression not relieved by, well, take your pick.

But no, to my mind, this....

“I condemn all the bombing by both the loyalists and the IRA.”

...is, despite its obvious structural similarities, not the same thing.

That’s because the “all other forms of racism thing” is an attempt to distract by bringing in something un-related. It implies that you can’t possibly be soft on anti-semitism if you were tough on Islamophobia or apartheid, and experience shows that simply isn’t true.

But loyalist bombing were not unrelated to IRA ones: they’re very related indeed. There really were atrocities committed on both sides of the Troubles, and while the fatalities were not numerically balanced, neither were they orders of magnitude apart.

As a result, specifically condemning both sides as Corbyn did seems like an entirely reasonable position to take. Far creepier, indeed, is to minimise one set of atrocities to score political points about something else entirely.

The point I’m making here isn’t really about Corbyn at all. Historically, his position on Northern Ireland has been pro-Republican, rather than pro-peace, and I’d be lying if I said I was entirely comfortable with that.

No, the point I’m making is about the media, and its bias against Labour. Whatever he may have said in the past, whatever may be written on his heart, yesterday morning Jeremy Corbyn condemned IRA bombings. This was the correct thing to do. His words were nonetheless reported as “Jeremy Corbyn refuses to condemn IRA”.

I mean, I don’t generally hold with blaming the mainstream media for politicians’ failures, but it’s a bit rum isn’t it?

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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