Mandelson's Fingerprints Were All over This Budget; ANALYSIS
Byline: James Forsyth POLITICAL EDITOR OF THE SPECTATOR
PETER MANDELSON sat in the gallery of the House of Commons on Wednesday, looking down on the chamber as Alistair Darling delivered the Budget. Mandelson was a happy man and with good reason. The Budget was what he had been arguing for. It was modest and credible. There were no absurd giveaways.
His Lordship's mood will have been further improved by how many of the Budget's new initiatives will expand his departmental empire. Indeed, so pleased was Mandelson that, in the words of one Labour MP, he began to conduct the backbenches; indicating, with a slight move of the hand, when they should cheer.
The contrast with Mandelson's mood after the pre-Budget report in December could not have been starker. Then, Mandelson was infuriated by the lack of a strategic message. He was so cross that he went on mic-strike, disappearing from the airwaves for the first time since his return to British politics.
Friends report that he became very down about the prospects of Gordon Brown ever grasping what was necessary to turn things round. While Mandelson was never going to act to bring Brown down, because he knew that would set off a cycle of events that could cripple the Labour Party for a generation, he became more relaxed about the prospect of others doing so. He seemed inclined to leave Brown and his key lieutenant Ed Balls to stew in their own juices.
But ultimately Mandelson's love for the Labour Party triumphed. Over Christmas and New Year, he and Brown had frank discussions about what Labour needed to do to be credible on the economy in these straitened times.
The result was a new Labour strategy built not around the old dividing line of investment versus cuts but around contrasting Labour's 'smart cuts' and 'investment in growth' with the Tories' supposedly more rigid approach.
This is the main reason the polls have narrowed since the turn of the year. The Tories are no longer fighting Brown and Balls but Mandelson. As one Tory frontbencher said to me this week: 'He is playing an appalling hand brilliantly.' He knows Brown's limitations and is trying to work within them.
Tory strategists concede that it was much easier when they were taking on Brown and Balls. This duo's desire to keep spending like it was in 1999 enabled the Tories to paint Labour as delusional: investment versus cuts might have worked in 2001 and 2005 but it just wasn't credible in 2010.
Voters who had been putting their own finances in order instinctively understood that the Government couldn't just carry on as before. Shadow Chancellor George Osborne grasped this and his strong emphasis on debt opened up clear blue water between the parties. But now that Mandelson and Darling have got Labour talking about spending cuts, even invoking the spirit of Thatcher, this blue water has narrowed again.
Darling told colleagues that this was 'my Budget'. In other words, that Brown didn't write it. …