As part of his preparations for this year’s Budget, Gordon Brown decided to spend more time with his family to keep himself in touch with the new priorities in his life. So it was in the past few weeks that his two young sons, John and Fraser, were allowed to come and play at their father’s feet in the Treasury while he finalised the figures. Not quite the actions of an ordinary working man, but being Chancellor of the Exchequer is no ordinary job. All the same, this was quite something for a man proud of his Stakhanovite capacity for hard work (Soviet pun intended).
Brown’s confidants have argued for some time that the Chancellor is a changed man, that his attitude to life and work has been transformed by fatherhood. This is why Lord Turnbull’s comments about his Stalinist-Macavity tendencies hit such a raw nerve. Turnbull was calling him a bully and a coward, a particularly unattractive combination. Whatever the truth, the former head of the civil service was describing the old Gordon. Turnbull left the Treasury before John Brown was born. Yet the timing of the comments could not have been worse.
This was always going to be a big Budget for Brown and not just in the way economists use the term (a significant fiscal intervention). This is not just Brown’s last Budget as Chancellor. It is the first he will have to work within as a prime minister. Whether, when the dust settles, it is interpreted as a tax-cutting Budget, a Budget for the poor, his green Budget, his education Budget, a Budget for business or all of the above, it is, more than anything else, his legacy to himself.
For this reason, it should be perused as the first statement of intent as leader of the country.
Brown was determined to leave No 11 with a bang rather than a whimper. His spectacular flourish at the end of his budget speech – a cut of 2p in the basic rate of income tax – certainly achieved that. The surprise element was reinforced by the abolition of the 10p rate in order to target tax credits at pensioners, as well as at the poorest children and families. This may turn out to be genuinely redistributive. The deal with major retailers to create 100,000 extra jobs is a more typical Brown touch. In an appeal to business that had appeared to be cooling on him, the Chancellor announced a cut in corporation tax of 2 per cent, which, he was keen to note, left Britain with a rate below that of his beloved, entrepreneurial US.
And yet, in some ways, Budget 2007 bears a resemblance to Budget 2006. A hike in road tax on gas guzzlers and an increase in tax credits for the poorest families were also fixtures last year. The commitment to raising spending in state schools to match levels in the independent sector were also announced last March. The mood music, too, is eerily familiar. A resurgent Conservative Party, the cash-for-honours inquiry, doubts over the Brown premiership: these were themes of last year’s coverage, too.
There are, however, three significant differences. Last year, Cameron’s Tories were already media darlings, but had no traction in the polls. Now they are 10 points ahead, or 15 when Brown is factored in as Labour leader. Secondly, a surprise rise in inflation to 4.6 per cent, according to some indicators, has raised questions about the long-term health of the economy. Thirdly, the unprecedented attack from Turnbull. There has been a tendency in Brown’s circle to be dismissive of criticism, but in this case they cannot afford to ignore it. There is now a growing number of people who have worked with Brown willing to criticise his style in government. The Chancellor is a man who famously doesn’t suffer fools gladly. But when cabinet ministers and top civil servants think they’ve been treated as fools, then powerful enemies lie in wait.
It is no coincidence that the first report from the government’s six-month policy review was published in the same week as the Budget, and these two announcements should be seen as interwoven. If Blair’s policy review was ever intended to lock Brown into the Prime Minister’s legacy, then he has been a willing participant in this process.
Education is at the heart of the Budget, but it is a vision of schools, colleges and universities entirely consistent with the new Labour vision of the future forged by the Blair-Brown alliance. The very financing of the rise in education spending (£76bn to £90bn by 2011) is partly dependent on selling off a slice of the £6bn student debt. This would simply not have been possible on such a scale without reforms to higher education funding and a huge rise in student numbers that have happened under Labour.
It is a sign of Brown’s determination to prioritise education that he has been prepared to announce the cash pledge to schools earlier than the long-term settlements for other government departments. They will have to wait for the Comprehensive Spending Review. The boost to city academies is consistent with this approach. It is fanciful to believe the Chancellor was ever opposed to private sector involvement in education or to giving schools greater autonomy. But it is noticeable that there is no mention of the new independent “trust schools”, whose introduction caused a major backbench rebellion last year. The silence in this area suggests this particular addition to educational diversity is unlikely to see the light of day under a Brown government.
So does Brown’s last Budget give an inkling of what “Brownism” might turn out to be? Has he finally discovered the “vision thing”?
On green issues, he is a late convert and yet to prove his credentials. As he showed in recent jousts with the Tories over a tax on air travel, Brown is not convinced that taxation is the best way of changing behaviour. His decision to hit the most polluting gas guzzlers with a hike in road tax rising to £400 shows he is shamelessly prepared to raise green taxes from people unlikely to ever vote Labour. Such is the Chancellor’s dim view of humanity that he believes wealthy people will be perfectly prepared to pay for the privilege of behaving badly. Instead, he believes good behaviour should be rewarded, which is why he has brought in tax breaks for people who generate their own electricity through wind turbines or solar panels.
In his final outing before he plays the starring role, Gordon Brown gave a studied demonstration in the arts of political charm. His last lines, in which he delivered his income tax cut, wrong- footed his many opponents, particularly David Cameron. They were also designed to reassure those on Labour’s benches that he can lead the party from the front, with a mix of radicalism, guile and personality.
This was the essence of Brown, for whom the demolition of his adversaries has been the driving force of his political life. With this Budget, he will hope he has given himself a new platform for the tougher mission ahead.
He has only rarely disappointed at these set-piece occasions, and this time in particular he rose to the occasion. But as prime minister, the challenges will be of a different order, relentless and day to day – and the lines will be altogether harder to rehearse.