Saturday, March 24, 2007

The Budget's dead cat bounce

The big question in politics at the moment is how much of a poll bounce will Gordon Brown get when (or perhaps if) he becomes Prime Minister.

Some have it that he will get such a bounce that he will call a snap general election, others have it that he will be cautious. Some, (including me) have it that the bounce will be a dead cat bounce. As in none at all.

Interestingly enough we have some early poll results from the Times here, covering how well the budget went down.

Dead cat bounce? Frankly it seems to be squashed. There is no poll bounce at all.

Regardless of how much people will be better or worse off, only 11% of people think they will be better off whilst 26% think they will be worse off. What is shocking is that the people least affected either way are high wage earners whilst those on low incomes can actually be worse off!

Hat tip to "me" on for the Times poll details.


loadofoldstodge said...

I think you and the other Conservative-minded activists have called this completely wrong. Yes, there may be a sense in which this Budget has been "smoke and mirrors" but this Budget cannot be taken in isolation.

This is essentially Brown's first Budget as Prime Minister and should be seen as the first of three (or perhaps four) before the next election.

Many of the measures won't impact until next year at the earliest and may coincide with falling interest rates. Brown is effectively painting Osborne (and Cable) into a corner and no one seems to see it.

By the spring of 2009, the economic scene could look very different with people enjoying the benefits of tax cuts and lower interest rates. How will Osborne and Cable be able to offer a viable alternative policy without Brown being anle to accuse them of being irresponsible ?

The short-term political effects will be severe, and Brown is well aware that Labour local Councillors will pay the price for this but Brown is a political animal and knows that the pain now will be forgotten in three years time if the economy turns up.

Anonymous said...

Dunno, Toynbee has called this differently. Will Brown ever be able to criticise the Tories for proposing tax cuts when he has so loudly and proudly announced his own? (regardless of the fact that it is revenue neutral overall)

If Gordon can shuffle the money around the books, why can't the Tories?

I can't help but feel that Brown has conceded vast political territory to the Tories, creating a political climate unrecognisable from the pre-Iraq war times when he was able to increase NI to fund the NHS.

Benedict White said...

loadofoldstodge, I tend to agree more with Timothy here.

Firstly, not that many people will fell much better off from the budget. Don't forget that the 2p income tax cut does not apply to people on tax credits because the clawback goes up at the same time.

Secondly your assertion that interest rates will have dropped by 2008 is speculation. They may have, but then again they may go down then up or up more then down.

Who knows?

The important thing to realise is that political ground has been conceded by Brown.