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Darling 'is Labour’s lightening rod'

For delivering a lacklustre Budget on the back of not finding a flick-switch solution for the UK’s faltering economy, Alistair Darling is in danger of becoming a scapegoat.

Evidencing this verdict yesterday, business experts pointed to a poll of 100 business leaders, reportedly showing confidence in the chancellor has sunk to a record low.

Pollster ComRes found that after his Budget last week, the number of tycoons with faith in Mr Darling fell to just 7%, his lowest support since the poll began last October.

The poll results, seen by the Independent, also show 70% said Darling is now ‘out of his depth,’ while only 15% said he understands business, also the lowest percentage so far.

“I doubt it would be true to say that the present government simply hasn't a clue as to what is actually good for business, [but] it certainly acts as if it doesn't,” said Roger Sinclair, legal consultant at Egos Ltd.

“It seems to want a nation of employees, not entrepreneurs. I'm certainly hearing more clients talk of emigrating - for that very reason.”

The Federation of Small Businesses, a small firms’ lobbyist, and the PCG, the trade group for freelancers, hinted that Mr Darling, and his Budget, was being unfairly blamed for wider discontent.

“Business leaders have many complaints at the moment: a faltering economy; an ever-more complex tax system; and apparently ever-increasing red tape, to name just a few,” said John Kell, policy officer at the PCG.

“None is exclusively of Darling's making, and none would inspire such low confidence on their own, but the fact they are all happening at once is creating a lot of unhappiness, and Alistair Darling is becoming something of a lightning rod.”

Simon Sweetman, the FSB’s former tax chairman, said he believes the ‘lack of confidence’ expressed in the poll about chancellor Darling isn’t personal.

Instead, it results from the political stance of the business leaders participating in the poll, who were quizzed after “waiting for bad news and rumours of economic downturn,” he said.

In the poll, almost 80% of tycoons said Darling’s Budget was bad for the economy, about two-thirds said it was negative for their business, and 92% said it won’t boost consumer confidence.

Yet the Forum of Private Business said the majority of its member companies feel “betrayed and disillusioned” by Budget 2008, particularly because their tax rates, hiked in Gordon Brown's last Budget, were unaddressed.

Intellect, the hi-tech trade body, echoed the dismay, saying the Budget’s little focus on IT education smacks of “a lack of appreciation of the real role of technology in the UK”.

The group, which represents 800 tech firms, also said that Prime Minister Brown’s Business Council still includes just one IT company, for a sector that makes up 10% of GDP.

“[But] the Budget wasn't nearly as disastrous for many groups as feared,” said the PCG, which represents contractors, primarily serving the IT industry, pointing to the Family Business Tax deferral and CGT relief.

“Could Darling have done anything differently in the Budget?” Mr Kell asked yesterday.

“It's hard to say: in macroeconomic terms, he does not seem to have done anything differently, at any point, from what Gordon Brown did during his ten years as chancellor - indeed, in many areas Darling is constrained by Brown's legacy.”

For shadow chancellor George Osborne, Mr Darling’s boss has played more than just a part in delivering what the Conservatives called a “bad news Budget” for Britain.

“It's not the fault of Wall Street bankers that we have the highest tax burden in our history – it's the fault of the Prime Minister,” Mr Osborne said.

“It's not the fault of some capitalist conspiracy that some five million of the lowest-paid people in Britain face a tax increase this April – it is the fault of a Labour Prime Minister who is trying to fix his economic problems on the backs of the poor."

John Redwood, chair of the party’s economic competitiveness group, said a Budget in 2008 that puts just a few extra pennies in the pockets of people who Darling wanted to woo is insufficient in today’s multi-million pound economy.

But the chancellor’s miscalculations, whether they be economic or political, don’t amount to the almost ‘no confidence’ vote tabled by the business leaders questioned, said the PCG.

“After Northern Rock, the CGT fiasco, ‘chicken Saturday’ and the government's political shakiness following last autumn's party conference season, Alistair Darling seemed the obvious target for a lot of political flak…sometimes deservedly, sometimes perhaps less so," the group said. "Once that happens, these things build their own momentum”.

Mar 19, 2008
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