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Last Updated: Wednesday, 21 March 2007, 15:23 GMT
Brown's Budget trick
By Nick Assinder
Political correspondent, BBC News website

Labour MPs - well, most of them - were looking for a sensational budget to prove Gordon Brown really is the political magician they desperately want him to be. And they got it, with knobs on.

Gordon Brown
Mr Brown pulled a rabbit from budget hat

It hadn't been leaked, no one had guessed it and few experts seemed to think he had the money to do it (as it turns out he probably hasn't, but more of that later).

But, just as Labour MPs started shifting in their seats ready to cheer the Budget package and throw ritual abuse at the leader of the Opposition, Gordon Brown pulled a genuine two-ton rabbit from his hat.

He was so close to the end of his speech when he revealed his plan to slash income tax by two pence in the pound there must have been a danger it would be drowned out by the rising hubbub.

But with those famous words he has deployed before - although never quite as late as this in his speech - he said: "I have one further announcement."

Silence fell on the chamber, to be broken no more than ten seconds later by whoops of delight from the Labour benches and gasps of disbelief from the opposition.

Lower rate

At a stroke, he caught the opposition on the hop, won the sort of instant headlines he was hoping for and reasserted his credentials as one of the most political chancellors in recent history.

It is also likely that he didn't harm his chances of taking over from Tony Blair in about three months' time.

Sir Menzies Campbell
Sir Menzies said he had spotted the trick

Needless to say, however, even as his MPs were cheering him to the rafters, the more cautious and suspicious were scurrying for their pocket calculators and re-winding his speech to check how all this was being paid for.

And, as it turns out, other changes to car tax, national insurance and, particularly, the abolition of his own ten pence lower tax rate help meet the bill and ensure the overall tax package balances out.

In other words, where he cut with one hand he snatched back with the other and many people may find they are no better off as a result - the key will be just how many, and who are worse off.

Liberal Democrat leader Sir Menzies Campbell got to it immediately and pointed out that even a casual glance at the famous Treasury red book - the detailed breakdown of the Budget measures - showed Mr Brown was paying for his apparent generosity by abolishing the ten pence rate.

"He is asking the poor to subsidise the rich," he declared. And that had some Labour MPs furrowing their brows - perhaps wondering if they had fallen for it.

Stalinist tendencies

It was, as ever, said Sir Menzies, a magician's sleight of hand. And that is a danger for the chancellor - once a magician's tricks are exposed they lose their impact, and may even disappoint.

Joseph Stalin
Mr Cameron made plenty of jokes about "Stalin" Brown
Tory leader David Cameron was clearly taken by surprise but spotted that Mr Brown had, in effect, adopted his own policy of "sharing the proceeds of growth between tax cuts and spending".

He also delivered some pretty effective jibes about Mr Brown's allegedly Stalinist tendencies.

"Labour MPs have just realised their next leader has got the tendencies of Stalin and the poll ratings of Michael Foot," he said.

None of this was going to take the shine off this package, even though it looks like the initial sparkle may begin to dull within a week or two, and particularly when individuals work out precisely what it all means for their tax bills.

Finally, it has to be pointed out, the chancellor started with a very dangerous joke.

He pointed out that, in the last 200 years, only one other chancellor had delivered 11 budgets.

He, however, would not be following Gladstone's lead and delivering a 12th budget after combining the positions of chancellor and prime minister.

That, of course, is exactly what his critics believe prime minister Brown may do, whoever his actual chancellor is.

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