This post originally appeared on Gavin's New Statesman blog

Before we rush to dissect the government’s new childcare policy it is worth pausing to reflect on the very fact that in an unprecedented time of austerity a Conservative-led administration is proposing to spend near on £1bn on childcare. There are all sorts of caveats and problems with the policy, when it will be introduced and how it will be paid for. But before we rush into all that we should note that today’s announcement confirms that the issue of childcare will remain at the centre of the political arena.

This post originally appeared on Gavin's New Statesman blog

The next election will see a battered electorate in need of economic and social respite confronted by a political elite woefully lacking in resources and public trust. Never in recent times will so much be asked from leaders who have so little to respond with.

The result is starting to pose interesting questions about some of the familiar features of electoral politics – one of these is the entrenched cult of pledge-card politics and the type of statecraft that underpins it.

The art of boiling down an entire election pitch to easily marketed bite-size promises – "short and catchy" as Peter Mandelson used to put it - reached its zenith in the UK in 1997 and has dominated subsequent campaigns even if the pledges have paled over time. Looking back there was an inverse rule between the size of the pledges and what they succeeded in communicating. In 1997, some of the commitments were certainly modest yet still managed to say something significant about the character of the future Blair government (not least by specifying where resources would be found to pay for new spending).

This post originally appeared on Gavin's New Statesman blog

Two years into the life of the coalition and all the sudden the passing of time seems like Ed Miliband’s best friend and David Cameron’s worst foe. For a government that has lost its footing, facing an opposition learning how to benefit from the stumbling and fumbling, the long expanse of time left in this parliament will be starting to feel less like an opportunity to develop and deliver an agenda and more like an ordeal to be survived.

It’s not just the slow motion horror of the six weeks since the budget or the likelihood that the next few weeks, dominated as they will be by the Leveson inquiry, will feel like a very long stretch indeed for Jeremy Hunt and David Cameron. It’s the six budgets and autumn statements the coalition parties have to negotiate before the next election; the thirty seven months of enervating governing grind to get through; and the fact that come the next election it will have been a full 23 years since the Conservatives won outright, an observation that is weighing increasingly heavily on the Tory ranks who sense their prospects of doing so next time aren’t brightening. A lot of politics is still to happen even before the parliament reaches half-time – and the second half is littered with all manner of political, economic and legal icebergs.

This post originally appeared on Gavin's New Statesman blog

Governments, like individuals, often like to believe their varying instincts and aspirations all fit comfortably together even when they don't. They prefer to try to keep these tensions under wraps and sometimes don't even like to admit them in private to themselves. And the coalition is a case in point.

One of its favourite claims is that, despite the fact that all sorts of welfare support is being removed from families on middle incomes, when it comes to the very poorest they are doing more than their predecessors. The pupil premium usually gets a mention here, followed by the expansion in student support for the most disadvantaged.

Another cherished claim is that punitive marginal tax rates for those struggling on modest incomes seeking to earn their way up will be reduced - a point  made with great passion by David Cameron in his 2009 Conservative party conference speech when he railed against an example of a 96 per cent tax rate hitting a single mother.

This post first appeared on Gavin Kelly's New Statesman blog.

Once in a while a policy moves from being partisan and divisive to representing the mainstream consensus in a very short period of time. That is, or at least was, the case with the national minimum wage (NMW). It wasn’t so long ago it was denigrated by much of the business community and the then Conservative opposition - but only a few years later it acquired a very different status as a statement of the bleeding obvious. The result, according to a timely new report by Professor Alan Manning, is that it has ‘settled down into a premature staid middle age’ following a noisy infancy without ever having passed through a teenage rebellion.

This post originally appeared on Gavin's New Statesman blog

“In this country we have to look upon budget promises as made of the same stuff as lover’s oaths.”  So said Lord Salisbury, three times Conservative PM, and his words are perhaps more apt than ever given that all the love drained out of the Coalition’s marriage some time ago. We need to sift carefully before being sure about what today really means.  

As with all Budgets we should start this process by asking what impact it will have on the overall economy, who wins and loses, and what it will mean for the political strategies of different parties. 

In terms of macroeconomics this budget was always going to be a non-event. It is broadly fiscally neutral, with only very minor upward ticks to growth forecasts. None of this is a surprise: this chancellor was always going to ignore those calling for more stimulus. This Budget, like all the others this Parliament, lives in the shadow of the choices made in the emergency Budget in June 2010 and subsequent spending review.

... and economists love to hate. 

This post originally appeared on Gavin's New Statesman blog

George Osborne's budget morning story, that Stamp Duty will go up to 7 per cent on properties over £2 million, shouldn't really surprise us. It has strong echoes of Gordon Brown's 2010 budget day story about hiking Stamp Duty up to 5 per cent on homes above £1 million in order to fund a tax cut for first time buyers. It's the tax that politicians have grown to love, and economists love to hate.

Not that the Chancellor will care much but he should expect plenty of gnashing of teeth from the dismal profession. Stamp Duty is after all a tax on labour mobility (a key economic resource), so it keeps people living in places they'd rather leave and makes it less likely they will move to take new jobs (though how much of a barrier this will be to those in a position to fork out £2m is far from clear). And the way it is currently structured results in major distortions in the housing market as small increases in house price generate large leaps in the tax owed.

This post originally appeared on Gavin's New Statesman blog

As we close in on the budget most eyes are still fixed on the fate of the 50p tax rate. Ignore for a moment some of the squeals from Labour on this issue (more in excited anticipation that it will be axed than horror) and spare a thought for the dwindling band of true Tory modernisers. Their two central ambitions over recent years have been to demonstrate an unswerving commitment to the NHS, and to show that they could govern the economy -- and tax policy in particular -- in the interests of the broad majority rather than the affluent elite. They are struggling to believe that having watched the coalition conspicuously squander the first of these strategic objectives that it could be planning to deliver the last rites to the second too.

Yet whatever the decision on the 50p tax rate, the heated debate over it risks obscuring another more nuanced, but still highly revealing choice facing Osborne. Who should benefit from the widely expected and costly increase in personal tax allowances: the vast majority of all tax payers, including individuals to over £100,000 a year (and indeed households on £200,000), or just basic rate tax-payers? An important issue in its own right -- and one which has been given new impetus by the coalition's travails over Child Benefit.

This post originally appeared on Gavin's New Statesman blog

David Cameron has been in Stockholm this week, expressing his love for all things Nordic from economic openness, to free schools, and the Danish TV series The Killing.

Based on his pronouncements today he's doubtless also been attracted to Borgen, the political drama in which a female prime minister juggles coalition politics and the demands of a young family at the same time as driving through her commitment to equality in the corporate boardroom.