Darling stranded in no man's land

ALISTAIR Darling was walking a political – and economic – tight-rope as he delivered his eve-of-election Budget. He had to balance the need to lower Britain's spiralling deficit to shore up City confidence, with the pressing need to re-energise Labour's poll ratings.

In trying, and failing, to balance these conflicting demands, the Chancellor found himself in no man's land, ostensibly because he failed to convince Gordon Brown of the need to set out how the Government will halve the national debt.

Mr Darling said his choice was to either "sit back and hope for the best" – or put Britain on the road to recovery with a concerted plan of action. He says he opted for the latter; the reality is that he did neither one thing nor the other.

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This was not a credible Budget for the future. It was a speech intended to serve Labour's short-term electoral interests, wrong-foot the Tories by penalising the wealth-creating elite and postpone difficult decisions.

Uniquely for this administration, the NHS and schools were barely mentioned. Many other announcements offered nothing new; they had been outlined many times previously. And Mr Darling had little to offer OAPs, another of Labour's core constituencies.

This tells its own story. It shows just how taut the public finances have become, and the Chancellor's talk about the post-election spending review failed to mask this reality. He knows this, but dared not say so because it would throw the economy even more off-balance.

Nevertheless, Mr Darling does deserve some praise. The nationalised banks are, slowly, returning to profitability and the Exchequer will be able to recoup the public's stake.

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This stems from the difficult decisions that the Chancellor took to stabilise the banking sector at a time of unparalleled crisis.

Also welcome is the support for first-time buyers, universities, small businesses and those measures intended to boost green enterprises at the heart of Yorkshire's new low-carbon economy.

However, these initiatives only merit a cautious welcome. For, in effect, the Chancellor was giving a few pounds with one hand through various tax holidays, efficiency savings and yet another commitment, for example, to privatise the Tote – and snatching hundreds of pounds from every middle income household to pay for this Government's debt addiction and extravagance.

Of course, many headlines will be dominated by his scheme to clamp down on certain tax "exiles" like Lord Ashcroft, the Tory deputy chairman. This money, if it is recouped, will only go so far.

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The bulk of the Treasury's income will come from middle class families paying more for fewer services, a bill that will rise further if entrepreneurs choose no longer to invest in Britain because of Labour's misplaced class envy. It is why Mr Darling could not scrap the hugely unpopular three pence increase in fuel duty altogether. The Chancellor needs the money, even if this rise is phased in. And it explains why he, almost slyly, glossed over his decision not to raise income tax thresholds in line with inflation. What this means is that those workers fortunate enough to receive a salary rise will pay proportionately more tax on their new salary – in addition to next month's deferred increase in National Insurance.

Yet Mr Darling did not spell this out. And why? Neither he, nor Gordon Brown, is prepared to be straight with the electorate about precisely how the country's debt will be paid off; certainly not before May 6.

Like confidence tricksters, they hope to persuade people that the good times are back when the reality is very different. The sheer number of delayed, or deferred, tax rises only reinforces the falseness of the Chancellor's optimism.

What voters should have been told is the likely scale of the future tax rises and how spending will be cut, even if many of the proposed measures are deferred to protect the fragile recovery. The random selection of numbers out of thin air by each Whitehall department will not suffice.

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Instead, Mr Darling has left the economy's credit worthiness in abeyance, investors taxed to the hilt, the public sector paralysed by uncertainty – and voters unsure about the final bill. It does not inspire confidence in the Chancellor's fragile position; Britain deserves better.

The consequence is the Government clinging on to this particular political tight-rope by its fingertips because short-term electoral advantage was again put before the national interest. Ministers only have themselves to blame for their perilous predicament – and, on this evidence, they will be undeserving of any rescue act that voters might choose to undertake at the ballot box.