John Rentoul: Heard the one about the understudy who wowed the Westminster crowd?

Thursday, March 22, 2007

Tier upon tier of impressive statistics and comparisons: France, Germany, the US and Japan; his small surplus over the economic cycle against the vast billions of deficits under the Conservatives; and all the children and pensioners lifted out of poverty. Then there were the put-downs of the Opposition who had not done their homework. A ritual formula, but he deployed it brilliantly. "I have received representations," he told the House, to put VAT on domestic flights and reintroduce the married couples' allowance. "On closer inspection," he said, he had discovered the basic errors in the Conservative proposals. On domestic flights, business travellers would be able to reclaim the tax. On the married couples' allowance, it would not benefit most married couples.

When Tony Blair showed his mastery of comic timing in his Red Nose Day sketch with Catherine Tate last week, the third or fourth response to it was: "Gordon couldn't do that." Ah, but, in a way, he can. He led Labour backbenchers out of the valley of opinion-poll despond with such dry understatement and thespian skill that he gave them many things to cheer about. Not only did they enjoy the partisan point-scoring for the sake of it, and not only were their souls refreshed by the anti-poverty gospel; they sensed something more significant, which is that Gordon Brown can do it.

Commentators and retired civil servants have been saying how impossible, crabbed and inarticulate their next leader is, but yesterday they rediscovered Brown's great skill at the political game. When he built up to his false peroration and the thundering Fife preacher suddenly stopped - "And I have one further announcement" - they remembered the joys of winning.

What Sir Menzies Campbell called Brown's "sleight of hand" in abolishing the 10p tax rate to pay for the 2p basic rate cut hardly matters. As the Conservatives discovered in the Eighties, the headline tax cut is more important than the taking away with the other hand, with one proviso; this is that the judgement of the Government's handling of the economy and public finances has to be favourable. And, on the basis of yesterday's performance, it should be.

For the first time since Nigel Lawson, a chancellor has taken up the mantle of tax simplification. Aligning the ceiling on National Insurance contributions with the 40p tax rate threshold gets rid of an anomaly that has plagued the tax system. It was interesting to hear Ed Balls, the junior Treasury minister known as the other half of Gordon Brown's brain, touring the broadcasting studios. Almost the first phrase to fall from his lips was "simpler and fairer". As with all Brown's Budgets, the net effect of this one will be mildly progressive. But, unlike all the Brown Budgets that went before, this one radically simplifies personal tax, thus disarming one of the heavier of the battering rams that have been tried in the past against the Chancellor's reputation - the charge that he is a meddler and a complicator.

It is sometimes said dismissively that Brown is good at strategy, at thinking eight moves ahead in the chess game, as if that makes him useless in the here and now. But yesterday he reaped the dividend of getting the strategic judgements right.

David Cameron hardly knew which way to turn. He tried the Stalin jokes that everyone had seen coming. He said "the spin will get worse" when Brown took over from Blair, but could not make the charge stick. He went for the gratuitously personal attack, otherwise known as Punch and Judy politics, mocking Brown for announcing higher borrowing through "privately polished" gritted teeth - thereby distracting from the substance of an important criticism of the Chancellor's forecasts. And then he welcomed the Budget for doing everything the Tories had asked for. "He's sharing the proceeds of growth!" he declared, to the cheers of his backbenchers, like turkeys cheering for Christmas. In other words, Gordon's stolen our Budget!

Brown yesterday marked a remarkable fightback. Since he became Tory leader, Cameron has made the running on green issues. David Miliband as Environment Secretary has done half the work of fending him off with attention to practical detail, but Brown has done the other half by a neat piece of stealth politics. After last autumn's pre-Budget report, Brown was roundly condemned by the green-thinking consensus for the feebleness of his £5 increase in air passenger duty. This tempted Cameron to come forward this month with a list of possible green taxes on air travel, including a surprisingly inept plan to monitor everyone's air miles so that the most frequent fliers could be taxed more heavily. It was a road pricing disaster of the sky. Meanwhile, hardly anyone has noticed that Brown's £5 tax will, according to Treasury estimates, cut air travel by 4 per cent - not enough, perhaps, but a significant reduction in a growing source of climate-change emissions.

How has Cameron ended up on the wrong side the two questions of tax that ought to be his own? On tax cuts generally and on green taxes in particular, Brown has outfoxed him. The one criticism in which Cameron sounded as if he really believed in his Budget response was the complaint that Brown was implementing the policies the Tories wanted. Yesterday, Brown did indeed share the proceeds of growth between tax cuts and public spending increases. He did shift the burden from income tax to green taxes. But that is the one criticism about which the Labour Party can afford to be supremely relaxed.

What really cheered up the Labour benches was not that Brown was good at delivering a Budget, but that he had David Cameron floundering. Budgets are not some specialist sub-branch of the political trade - they are absolutely central. Yesterday Brown proved that if you can get Budgets right you can get being prime minister right, too.