13 MARCH 1993, Page 6


A Budget for jobs? Mr Major's, perhaps, but not the Chancellor's


keep being told the Opposition is ineffectual because there are few issues on which it can bring itself to oppose the Gov- ernment. Both main parties (whether they admit it or not) support high state spend- ing, intervention in industry, rebuilding the manufacturing base, high taxation and the stampede to 'the heart of Europe'. Yet, most of all, Labour's inadequacies prove that when you have a weak government you get a weak opposition. There is no need to expend intellectual effort embarrassing the Government, since it does a world-class job of embarrassing itself. Therefore, the oppo- sition becomes complacent, and allows its instinctive second-rateness to take over.

How different from five or six years ago, when the Tories had an unassailable major- ity of 100 and a leader few on the Conser- vative backbenches dared contradict. That government inspired real passion in a Labour opposition that, unlike the present one, had not the remotest chance of office. Three achievements stick in the memory. Mr Robin Cook not only ended the career of Mr John Moore, but forced Mrs Thatch- er to split the Department of Health and Social Services in two so that the ministers in charge of each half would have a fighting chance of maintaining their credibility. Mr John Prescott, the Hull merchant seaman, ended the long and distinguished ministeri- al service of Mr Paul Channon, a man trained for office from the cradle. And, most notable of all, Mr John Smith and Mr Gordon Brown exposed deep differences between Mrs Thatcher and Mr Nigel Law- son. This helped fuel the fires of faction in the Tory party that removed her from office, and which still burn today.

Next week, when Mr Lamont presents the Budget, the Smith/Brown auld firm will be back in the front line. They used to be shadow Chancellor and shadow Chief Sec- retary; now they are shadow First and Sec- ond Lords of the Treasury. Results since the team was reunited last July suggest they have yet to recapture their previous form. Any Opposition worth the name would have had Mr Lamont removed, and Mr Major fighting for survival, after the deba- cle of ERM withdrawal; but not Messrs Smith and Brown. Sheer Tory incompe- tence in economic policy has been met by sheer Labour incompetence in exposing it. All the sins for which Messrs Smith and Brown would castigate Messrs Lamont and Major are those in which they have indulged too; support for the ERM, profli- gate public spending, and higher taxes. That is why the effective opposition to Mr Major comes from his own side, in those pockets where Tory values still survive.

There is little sign of Labour developing an economic policy. 'We're not saying any- thing about interest rates at the moment,' one of the party's sages told me the other day. 'The ERM? Well, we still believe in fixed exchange rates ... but, er, not at the moment. The burden on industry would be too great. We need to do more to help our industry's competitiveness.'

This, I suggested, seemed to show further agreement between Labour and the Tories. After all, sterling's slump had brought a much more competitive exchange rate, and interest rates at which entrepreneurs could afford to borrow more. He agreed; and defended Labour's commitment to an eco- nomic policy of the type demanded by the Maastricht Treaty as one that would have been practicable had the wicked Tory gov- ernment not torpedoed the economy.

That is, of course, twaddle. All that can be said in defence of the Government's economic stewardship is that the same problems would have happened, only soon- er, had Mr Kinnock become Prime Minis- ter last April. But at least in one respect Labour is consistent. In the good old days of the Smith/Brown double act, they and Mr Kinnock would react with outrage when probed about their economic plans. It would be made clear that, until an election came, such plans were something Govern- ments made; oppositions merely exposed the absurdity of them. That is happening again now, with the added spice that we all know Mr Brown and his boss have no alter- native to what the Government is doing.

Indeed, even Mr Brown's ideological dif- ferences with Tory policy are not so stark. In a recent speech he proclaimed that the objective of recovery 'cannot be met merely by the application of free market eco- nomics'. But then Mr Major, in his retreat from Thatcherism last week on manufac- turing industry, would appear to agree. Mr Brown wants a budget to 'raise the quality of investment in people, industry and infrastructure'. Given the economic policy since White Wednesday, that could be pre- cisely what he gets: though he will not, of course, have the good grace to say so. Provided Mr Major uses the opportunity deftly, he should find that the timing of this Budget could not be better. He urgently needs to prove he can do something right, not just for the country, but as a party man- ager. As Paul Johnson says on page 25, the Prime Minister's authority is badly dam- aged. The loss of a vote on the Maastricht committee stage last Monday has exacer- bated this problem. Mr Major spent three days threatening, cajoling, and ultimately begging the rebels to support him. More than one in five of the non-payroll vote did not. It was the most humiliating blow of his premiership, so far.

The problem of authority is, at heart, economic. The reason so many Tory back- benchers have contempt for Mr Major is that he and his unresigned Chancellor got the ERM so wrong. In turn, Mr Major resents them because they got it right. If he were to use the Budget to bury the past, by giving the clearest signal yet that a return to an economic policy dictated by the ERM was out of the question, it could provide the party unity Mr Major so badly wants.

That would be a good base for a 'unity Budget', though it would need other ele- ments. There is general agreement among Tory MPs of all factions that tax increases would snuff out any recovery. Many MPs feel interest rates should come down another 1 per cent. A mainly neutral bud- get that could be painted as a convincing boost for enterprise, expansion, growth, and competitiveness would at least display good faith with the business community. It would also give the Prime Minister's inter- nal critics little to complain about.

It is also, one is led to believe, the sort of Budget Mr Major would like. Yet Mr Lam- ont, according to colleagues, has been scouring the ministerial ranks looking for support for tax increases, but finding virtu- ally none. To keep taxes down would at least put some distance between the Tory and Labour front benches, and perhaps provide us with some lively debate after next Tuesday. If such a policy puts Mr Lamont's nose out of joint, that would be of no long-term consequence. If he uses the Budget to give the Government and his boss the lift they both badly need it would not be a reason for keeping him in office any longer; it would merely show that his continuance there since last September has not been entirely pointless.