Is another Darling U-turn on the cards?

Today’s Standard reports that Alistair Darling is set to back down over his plans to increase vehicle excise duty.  It’s hardly surprising.  The proposal was always likely to prompt a backbench rebellion as well as public outcry – two things that the Brown Government can ill afford, particularly at the moment.

I imagine that No.s 10 and 11 will try and spin any concessions as a “recognition that British people need supporting in the current economic climate”.  But if the 10p tax fiasco taught us anything, it’s that voters rightly remember who to blame for the original proposal rather than who to “thank” for the U-turn.  Labour certainly shouldn’t expect a post-back down poll boost.

And then there’s the question of what it means for the public finances.  HMT will have factored the VED rises into their future plans, and any concessions will lower the amount available in the Exchequer’s coffers.  Can we expect tax rises elsewhere to make up the shortfall?  Or perhaps even more borrowing?  All will be revealed in the Pre-Budget Report in a few weeks’ time.