Osborne gets away with regressive VAT rise thanks to Lib Dem cover

Harman on fiery form as she lays into coalition’s first, welfare-slashing Budget.

The extent to which there is unity in the coalition was vividly demonstrated as George Osborne delivered the government's first Budget this afternoon, measured by the times at which Nick Clegg chose to nod, as he frequently did, and when he chose not to.

The Lib Dem leader looked grim-faced as the Chancellor introduced an increase in regressive VAT to 20 per cent, a policy which, as Harriet Harman reminded the House, the Lib Dems once described as a "secret VAT bombshell".

The acting Labour leader also quoted David Cameron as saying: "It's very regressive. It hits the poorest hardest."

Harman went on to ridicule the Lib Dem frontbenchers as "fig leaves" for the Tories, and turned Vince Cable's own memorable "from Stalin to Mr Bean" attack on its head by describing the Business Secretary's transformation from "national treasure to Treasury poodle". Cable smiled.

The other regressive headline from the Budget -- and again a moment when an otherwise nodding Clegg merely looked down at the floor -- came when Osborne announced, like his heroine Margaret Thatcher, that he was freezing child benefit for three years. This is a proposal pushed by Iain Duncan Smith, who has misleadingly been portrayed in recent years as a kind of reborn Robin Hood with a mission to help the "vulnerable". Progressive it was not. Nor was the abolition of the pregnancy grant.

On the other hand, an assured Osborne talked the talk of redistribution (he even referred to the Cameron-led administration as a "progressive alliance") and the widely trailed move to enhance the bracket of lowest-paid out of income tax -- a step on the way of lifting the lowest income-tax threshold to £10,000 -- was indeed designed to incentivise jobs, and goes a long way to calming any Lib Dem jitters.

But neither that, nor a new bank levy set for next year, stopped Harman laying into what she called "a Tory Budget that will throw people out of work, hold back growth and harm vital public services". She added: "This is the same old Tories." David Miliband, running for the Labour leadership, immediately described it as a " 'give with one hand, punch with the other' Budget".

Finally, the true colours of this government, especially on welfare, are beginning to be laid bare. The Labour opposition, including the leadership candidates, have their work cut out. Harman sounded genuinely pained at the Lib Dems' decision to prop up the Tories' agenda. But this is only the start. Let no one say there are no dividing lines in British politics.

James Macintyre is political correspondent for the New Statesman.
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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.