Public needs more details before trusting Labour again

TO NO-ONE'S surprise, it was a highly political Budget as Chancellor Alistair Darling sought, against the backdrop of unprecedented economic turmoil, to lay the foundation for a fourth Labour general election victory.

Given that he had only a limited amount to say, Mr Darling delivered his statement to the House of Commons with considerable aplomb and even managed to get his own back-benchers cheering when he unveiled the government's intention to co-operate over taxes with Belize, the base for the Tories' major donor, Lord Ashcroft.

But beyond the delivery of the speech, however, it was the substance that was important and this Budget bore the cautious fingerprints of Mr Darling not the telltale footprints of the Prime Minister, Gordon Brown, as he tried to insert injudicious pre-election spending pledges.

Within the extraordinarily tight spending constraints forced on the government by the need to support the collapsed banking sector, the Chancellor was able to find some populist and potentially popular measures which make sense in policy terms and, conveniently for Labour, politically.

Stolen from the Tories it may have been, but a two-year stamp duty holiday for first-time buyers purchasing houses costing up to 250,000 gives the hard-pressed housing market a lift and helps those who, because of the banks' reluctance to lend, have found it difficult to get on to the property ladder.

In paying for the measure by putting stamp duty on homes costing more than 1million, Mr Darling was both recognising that this sector of the market has not been so badly hit by the recession and sending out a clear message that Labour was on the side of hard-pressed aspirant middle Britain, and setting a trap for the Tories over whether they would rescind the higher rate.

More generally, ideas like a 2.5 billion growth package to help small businesses and a new 2 billion "green" investment bank, funded in part by the sale of assets such as the Channel Tunnel rail link, are welcome as was the commitment to force the part-nationalised banks to lend more to businesses along with the setting up of a body to make sure businesses seeking loans are being fairly treated.

In terms of what the Budget meant for Scotland, there was little detail beyond vague promises of a some 1,000 jobs out of the 15,000 being taken away from London as part of a welcome move towards decentralisation; and a 150 million further amount in Barnett formula "consequentials".

Mr Darling revealed an 11 billion programme of efficiency savings across Whitehall, including cuts of 4.35 billion from the Department of Health and 1.1 billion from the Children's Department. This could have a negative impact on Scotland but last night it was unclear if there would be a Barnett impact – a sign, perhaps, of cuts to come.

The Chancellor was also able to announce that borrowing this year would be 167 billion – down 11 billion on the 178 billion forecast in the Pre-Budget Report (PBR) – falling back to 74 billion by 2014-15 but this development, announced as it were a hugely significant piece of good news, only serves to highlight the dire position the country is in financially.

If there was one overarching message from this Budget it was that, whoever is in government after May, we will all have to bear the burden of this massive debt for at least the next decade. We should remember, too, that Mr Darling has already begun to make us pay.

The Chancellor was able yesterday to say that he had not changed personal taxation but the rise in national insurance by 1 per cent next year combined with the increase to 50 per cent of income tax for those earning more than 150,000 this April and the freezing of income tax allowances amounts to a considerable tax rise already in the pipeline.

These rises, appropriately described as "stealth taxes" by the Conservatives, are the immediate legacy of Labour's need to deal with the recession and there is little doubt that there are more of the same to come after the election.

It was therefore disappointing, though not surprising, that Mr Darling was not more honest about what is to come and that, equally, the Tory leader David Cameron in his reply to the Budget – that was witty and barbed – was unable to be specific about what his party would do, if it wins power.

Yesterday gave us more detail on where Labour would take us if they win but with both major parties promising spending reviews if elected, and the Tories pledging an emergency Budget within months of taking power, voters are still left in the dark.

As it often does, more may emerge over the next few days as we look at the Budget small print but as things stand, if we are to trust them with our votes, and give them a mandate to take the further, drastic remedial action that is required to get the UK back to economic health we need more information – a lot more – than we got yesterday.