A Budget aimed at winning votes
Chancellor Alistair Darling faced a ticklish problem yesterday when he stood up to deliver his Budget. It was Labour's trump card in the run-up to the General Election. Behind at the polls, even if the gap to the Tories has closed in recent weeks, he had to appeal to two constituencies if the Government is to stand any chance of being returned to power.
Those two constituencies - ordinary voters and the financial markets - were not necessarily looking for the same thing. It is a measure of the Chancellor's political adeptness that he appears to have succeeded in his primary aim. While the Budget is unlikely to send voters into raptures of joy, neither is it likely to harm Labour's electoral prospects.
The Chancellor played Robin Hood to perfection, suspending stamp duty for first-time home buyers while applying a higher rate of duty to properties valued at more than £1m. As the Tories complain that Labour has stolen their idea, those hoping to get onto the housing ladder will be glad of the new measure. It is an initiative which will be welcomed in Northern Ireland, where the housing market has stagnated for some time. This could be the incentive needed to restore confidence among buyers. A slight easing in the size of deposits required by mortgage lenders would also help.
There were also a raft of measures to increase tax for the better off, again something that will do little to reduce the Government's appeal to the masses whose income falls well below the levels affected. Mr Darling, no doubt, will rejoice in the CBI comments which described the Budget as very clever politically. There was also enough in it to keep the financial experts and money markets happy, although it is usually a few days before the devil of the detail is fully recognised.
Mr Darling painted a rosier than expected picture of the nation's economics, saying there were signs of recovery and cutting the deficit forecast for this year by £11bn. It is a picture not everyone agrees with, but it is difficult to argue against until the books are balanced well after the General Election. There were other crowd-pleasing announcements such as the staggered fuel duty increase, a growth package for jobs and 20,000 extra university places. It was all pitched to show this Government cares about the ordinary voter even in harsh times, a political rather than an economic message.
While the Chancellor accepts tougher measures will be needed to deal with the debt mountain over the lifetime of at least the next Parliament, he now has drawn battle lines for the election campaign. He has chosen a different, more populist, way of dealing with the economy than the Tories, but one which it is difficult to challenge him on. Whether it is the correct way of tackling the problems only time will tell. Alistair Darling is hoping he will be back in No 11 Downing Street before then.