A couple of links to Dave's Part.

Here are two posts from Dave’s Part - 'Atrophy: how the left blew its big chance.'

New Labour has from the start been gulled into intellectual stupor by its own self-delusional rhetoric. Convinced that it was indeed ‘the political wing of the British people as a whole’, it neglected even to renew the bases of Labourism itself.

Old Labour, by contrast, pulled up the drawbridge and refused to acknowledge that the last three decades were happening. As a combined result, the Labour Party is now so hollowed out that it could collapse at the slightest push.

The Marxist left, which prides itself on being the brains of the operation, for the most part retreated back to fundamentalism. There has been no attempt to come to terms with the need to put Marxist philosophy on a footing devoid of dialectics, for instance, or even to operationalise fully the essential concepts of Marxist economics.

On the Budget and the 50% tax rate - 'Return of class war. Not.'

Toynbee at her most divisive on the financial crisis

Polly Toynbee writes what I had been waiting for someone to write. Toynbee re-contextualises the financial crisis – she does a great job or a terrible one (if you read some of the comments). Read the whole piece and make up your own mind - ‘After the lie of the free lunch comes a real political choice’.

Guardian editorial on the financial crisis & cuts in spending

Guardian editorial on the financial crisis and the likely cuts in spending - 'Public services: The rise and fall of the state.'

"Some have argued that we should cut public services," Alistair Darling said on Wednesday, before adding "immediately". That one word add-on to Labour's standard attack on the Tories was perhaps the most telling moment in his whole budget speech, an implicit concession that the two frontbenches are now agreed that there will be big cuts to services. The dispute between the parties is no longer if but merely when the axe will fall. [...]

The single biggest slug of public money goes on paying the public wage bill, and nurses and teachers will soon feel discouraged if their salaries fail to keep pace with the general standard of living. Indeed some will vote with their feet, at which point pupils and patients will feel the effect. The second great tranche of the cash goes on state benefits, easily the most expensive of which is the retirement pension. This will only add to the pressure since - starting next year - the ageing of society will pick up pace, as the baby boomers start to reach pensionable age. And all the while, new cancer drugs and other technologies will be adding to the pressure on services. [...]

True, there are some things, notably Trident and ID cards, which this newspaper would be keen to see scrapped. But although each of these misguided projects has a total price tag in the low tens of billions, the year-on-year costs consume a minuscule share of the state's overall budget.[...]

Many secondary fields of state spending, such as housing, have already been cut to the bone. Other cuts around the edges - imposing museum charges or privatising the BBC, for example - might soon be on the agenda, but would impoverish public life without fully fixing the public finances.

In large part, at least, the savings are likely to come from those items of spending whose relative importance has grown non-stop since the second world war - health, education and social security.

Labour & press relations

Andrew Neil’s blog, which on the main criticised what he saw as Darling’s optimistic economic forecasting, made an interesting point about media relations.

One thing is clear to me: this Budget may or may not mark the end of New Labour but it certainly marks the end of the Murdoch newspapers' dalliance with New Labour.

If this is the case, which I suspect it is, then this surely is the end of the Labour government’s reign. The papers’ response to the budget suggests so too.

One thing stands in Brown’s favour, the declining circulation of Murdoch’s papers. Although by even mentioning that I feel that I have overstated the case. Although the might of Murdoch’s press empire might not be what it once was, his influence is still immense.

The Guardian columnists' view of the budget.

The Guardian columnists' view of the budget.

Jonathan Freedland’s offered an assessment that was no doubt similar to much of the Left's.

To see Alistair Darling deliver his budget was like watching a man pushed from a skyscraper window, falling calmly, even gracefully, as he somehow managed to remove his jacket, raise it above his head and tie it into a makeshift parachute.  You couldn't help but admire his ingenuity and optimism - but you still felt sure it was bound to end in a sticky mess.

Polly Toynebee’s Labour-friendly, if no more optimistic, viewpoint - 'Polly Toynbee: At last, a budget where the super-rich's bluff is called. Shame it's all too late'

When the new 50% rate kicks in next April, this last social democratic flag may be drowning, not waving

Is this a people's budget? It did soak the rich - just listen to their indignation. The 1.5% who earn over £100,000 will yet again claim an assault on "middle England". They will protest that productivity, growth, aspiration and the very future of the nation will be imperilled by skimming just a little cream off top earners. […]

Taxation is the only easy way to restore a very small measure of sanity to the unjust rewards of the rich. […]

Wealth has lost touch with reality: however often the rich are reminded that 98.5% of people don't earn £100,000 and only 10% earn over £40,000, they insist they are only "ordinary" and "middling". How cleverly the newsrooms of the right, led by extravagant earners, have diverted popular wrath on to the handful of public servants who earn more than the prime minister - without adding that this is an inevitable, if reprehensible, leakage from private-sector greed. […]

On the cuts

It hardly bears thinking about what these numbers will do to the old and disabled, children in care, children's centres or prisons. Councils will be left with shrivelled budgets to meet soaring demands from more old people and more deprived children. After the years of plenty, public servants have no experience in how to manage the coming famine. George Osborne's promise to cut now and even deeper suggests he too has no understanding of the misery this means.

For more on the 2009 budget see

• 'Andrew Neil on the 50% income tax rate for higher earners'
  
• 'Labour & press relations'
• 'Budget talk and press management'

Andrew Neil on the 50% income tax rate for higher earners

Andrew Neil on the 50% income tax rate for higher earners - 'Worse than we feared?'

The independent Institute of Fiscal Studies uses a more dynamic model which rightly assumes some high earners won't (for example, they might leave the country, stop working or pay themselves anything above £150,000 in tax-free pension contributions). It recently concluded that the proposed 45% would not bring in ANY extra revenue and indeed might actually generate less. We will wait with interest to see what it makes of the new 50% rate.

Threats that high earners will leave the country are often dismissed as propaganda and no doubt they often are. But a 50% top rate of income tax means Britain will have the third highest top rate in the industrialised world -- only Sweden (55%), Denmark (59%) and Netherlands (52%) will be higher while America (35%), Canada (29%), Hong Kong (16%) and Dubai (0%) could start to look even more tempting to Britain's high fliers, especially now the streets of the City are no longer paved with gold and there are mumbles among them that the Budget of 2009 represents the end of New Labour.

Good riddance to bad rubbish, you might say, and if we see the back of some of the bankers who've brought us to our knees you might be right. But the top 5% of income tax payers account for half of all income tax receipts. You don't want to lose too many of them when you're already planning to borrow £800 billion.

Budget talk and press management

Impressive political manoeuvring from Labour – they have managed to ask a questions of the Conservatives that they will find difficult to answer. In Nick Robinson’s view:

[A] new 50% top tax rate for those earning over £150,000 is designed to put the Tories on the spot - do they back it or pledge to reverse it? Since it will be introduced before the next election, they will have to say.

If they attempt to swerve this political trap they will face criticism from some in their own party and in the Tory press who will demand that they protect "our people".

He continued …

Stealth tax rises are out. Overt tax hikes on the rich are in.

Why?
• In the name of fairness.
• To cheer Labour's supporters.
• To wrong-foot their opponents.
• To distract the media.
• Oh, and to raise money (although the Institute of Fiscal Studies has questioned whether increasing the top tax rate will raise much).

Their hope is that tomorrow's headlines will be dominated by questions about Labour's breach of their manifesto pledge and that the Tories will be asked for months to come whether they will reverse that tax rise or not.

What they know is that opinion polls show that higher taxes on the rich are now popular in the way they once were not.

What they also know is that David Cameron and George Osborne will come under pressure from the Tory press and Tory bloggers to promise to reverse this measure.

What they also know is that that is a more comfortable place to be politically than answering questions about why the chancellor's just confirmed the deepest recession, the fastest rise in unemployment and the biggest rise in borrowing since the war.
[…]

stealth spending cuts have replaced stealth tax rises as the principal tool of the Treasury. […]

stats suggests that that headline grabbing rise in the top rate of tax will actually raise less than increased fuel duty (up 2p a litre in September) and the squeeze on public spending.

And something that will not be too high on the news agenda - the terror plot that probably wasn't.

For more on the 2009 budget see

• 'Andrew Neil on the 50% income tax rate for higher earners'
  
• 'Labour & press relations'
• 'The Guardian columnists' view of the budget'