Brown’s Budget tax shock deflects from bad week

Gordon Brown may have promised not to use Budget 2007 to launch his leadership bid, but Westminster commentators have already called it one of his most political Budgets yet.

Entering the Commons following poor opinion polls, inflation at a 15-year-high and a ‘Stalinist’ jibe from a leading civil servant, the chancellor was not unveiling his Budget from a comfortable position.

However, as he ended Budget 2007 with the words “I have one further announcement”, he caught the opposition on the back foot with plans to cut income tax by two pence in the pound.

As one of the few major policies of today’s Budget that had not been leaked, Labour backbenchers cheered the announcement as the Conservatives were heard to gasp in surprise.

Responding, David Cameron accused the chancellor of cynically announcing the tax cut to escape a “deep hole”, remarking it was the move of a chancellor heading towards a general election, not a party leadership contest.

Mr Brown began Budget 2007 on an uncharacteristically light note, thanking his “comrades” among the civil service – in reference to former civil service head Lord Turnbull’s “Stalinist” attack.

Capitalising on the headlines surround the chancellor this week, Mr Cameron said Labour MPs may have been cheering Mr Brown now, but like Stalin he would “wipe them out later”.

“Let me tell you what the chancellor’s real problem is,” Mr Cameron continued. “It is not that he is a Stalinist who holds all his colleagues in contempt – although I have to say that probably doesn’t help – it is that he has wasted money on an industrial scale.”

The Liberal Democrats claimed the entire Budget was a wasted opportunity, dismissing it as a “wait and see budget from a wait for me prime minister”. Crucially Mr Brown had failed to take the opportunity to rebalance the tax system in favour of the least wealthy, Lib Dem leader Sir Menzies Campbell told the Commons.

Mr Brown began his Budget by highlighting the UK’s economic growth. A decade of economic growth is set to continue, he claimed.

The chancellor was speaking following yesterday’s figures showing consumer price inflation has risen to a 15-year high of 2.8 per cent.

Mr Cameron added the Chancellor had been forced to announce borrowing figures through “gritted but privately polished” teeth, in reference to Mr Brown’s recent dental work.

Touting today’s announcement as a budget for families, Mr Brown explained his reasons for rejecting the Tories’ calls for a married couples’ allowance. This would penalise three million widows as well as divorcees, he said, and exclude 11 million children.

He also rejected Conservative calls for VAT on passenger airline tickets, claiming this would only save 50,000 tonnes of carbon by 2020. However, he failed to offer his own alternative on aviation.

Speaking in prime minister’s questions before the Budget, Tony Blair paid his own tribute to Mr Brown’s economic legacy.

“Gordon Brown has delivered the longest period of economic growth in our history and we should be proud of that,” Mr Blair said.