Alistair Darling started with what could have been as much a reminder to Gordon Brown, sitting next to him, as it was a calm attack on the Tories: he said the Budget takes place against the backdrop of the worst economic conditions in “60 years” — the formula he used in 2008 which resulted in him being briefed against by some close to Brown.
The Chancellor also backed the state interventions made, including the bank bailout plan that some in Whitehall say was his idea, noting: “The record shows the right calls were made.”
Darling reiterated that the recession began in the United States and spread rapidly around the world. He said that “not everyone here supported the action that was taken” in the aftermath, “but with hindsight it is even clearer that the right calls were made”.
The Chancellor sounded strong notes of caution, saying “there is nothing preordained” about recovery. He also urged the EU to intervene, saying it must do more to support trade and discourage protectionism.
“Over the last two years we have been reminded of the force for good that government can be in protecting people,” he said.
Looking back at the “unprecedented and controversial” nationalisation of Northern Rock, he again said the Labour government’s decision had been vindicated. “We intend to get all taxpayers’ money back,” he added.
* Bank reforms to extend accounts to up to a million more people.
* Doubling of stamp duty limit from £125,000 to £250,000 from midnight tonight (Tory cheers).
* Increase in stamp duty to 5 per cent for residential properties worth over £1m (Labour cheers).
* Isa limits to increase annually in line with inflation to help saving.
* Fuel duties to rise by a penny in April.
* Inflation target remains unchanged at 2 per cent.
* Borrowing to fall to £74bn by 2015 — £8bn lower than forecast in December.
* Public-sector net debt will fall after 2015. “This is the fastest deficit reduction plan of any G7 country . . . To start cutting now would risk derailing the economy . . . I am not prepared to take that risk. We have worked too hard as a country to come through this recession.”
* 60 per cent of taxes will be paid by the top 5 per cent of earners. This is not through “dogma or ideology”. No further announcements on VAT or income tax. (Ed Balls’s apparent desire for the top income tax rate of 50 per cent to be applied to earnings in excess of £100,000 has clearly been rejected.)
* Cider duty to rise in line with other alcoholic drinks. (As the wag sitting next to me said: “That will destroy Labour in the West Country!”)
* Inheritance-tax brackets frozen.
* Business rates cuts for one year from October to help small businesses.
* Annual investment allowance to be doubled for small businesses.
* Entrepreneur’s relief for capital gains tax doubled, with the threshold increasing to £2m.
* Broadband coverage to be extended to rural areas.
* The UK is ready to sign tax information agreements with three further countries, including Belize (where “Lord” Ashcroft is based), within the next few days. Tories look glum as Labour MPs cheer in the most exciting moment of the Budget.
For the most part, Darling was listened to in respectful silence while presenting what he knows may be his last Budget.
His stock is high in this place. His attacks on the Tories were coded and dignified as well as calmly delivered. He did not even mention the opposition. However, though cautious, this was a Labour Budget couched in refreshingly ideological language.
The borrowing projections will go some way to answer critics of the UK’s debt levels, and the plans to help small businesses invade some Tory territory. The Belize crackdown was the icing on the cake — and a great joke.
Darling is one of the government’s most impressive figures and, despite the shouting, many Tories here know it, too. The verdicts from the economic experts, of course, are yet to come. But, once again, the battle lines are drawn. Labour is down but not out.
* Peter Mandelson, looking on from the gallery above.
* George Osborne reading messages on his BlackBerry during the Budget (from advisers perhaps?).
For more on Alistair Darling and his remarkable political journey see my report in this week’s magazine.
Andrew Hawkins, chairman of ComRes, said of Darling’s speech:
“This was a supremely political Budget. Labour’s number one aim must be to persuade its own voters that the Conservatives would both mess up the recovery and redirect tax receipts away from poorer income groups.
“The whole speech was a long-winded way of saying, ‘Don’t let the other lot mess things up,’ and is aimed at sending all the right messages to Labour’s core voters — who are still far less likely to vote than wealthier voters.
“There is now at least some clear water between the two main parties. This livens up the election campaign no end by setting the Conservatives the challenge to be clearer and more credible in messaging their economic policies. It’s also likely to be pretty dirty, as campaigns go.”