The clear message that I took from the budget was that we are to expect an election soon: It was the ‘cut and run budget’
There were 98 measures, some worthy, some very much less so, but all of them pretty small beer.
It really was a case of Hamlet without the Prince:
In the absence of the spending review, and evidence of any appetite to address our mounting debt, surging youth unemployment and low productivity, the budget lacked any credibility.
It was a ‘try and upset as few as possible budget’, designed, no doubt, to get the Government unscathed to a spring election next year.
Of course, the Chancellor did say that he awaits the Timms PIP benefit review, and the Alun Milburn Youth Employment review, but having the budget first enabled him to get out of serious and painful measures on those issues before an early election in the Spring.
Equally, given that, as Defence Secretary, he thought that inadequate finance was urgent enough to bring down Kier Starmer’s premiership, but as Chancellor, that urgency has disappeared. Indicating that the Government does not want to be embroiled with such difficult choices before an election.
The problem that demands to be addressed was brilliantly and with candour enunciated by the Secretary of State for Work and Pensions when he said, “every meeting I have is one of who can we tax in order to pay benefits to others?”
The calculation that the Chancellor has made is that, for Labour, the short-term political pain of addressing this issue is greater than the long-term financial damage of doing something about it now. So, he’ll let it run on, and, so proceeding, we’ll borrow more and pay higher mortgages and prices, but not before the Government cuts and runs for an election in the Spring, before those particular chickens come home to roost.
The Chancellor did decide to ‘soak’ the banks, notwithstanding the damage that will do to the economy as a whole, so reliant are we on the success of our financial sector, and our dependence upon it for credit.
It was a dreadful signal to send to investors: ‘if you do well, if you are successful…we’re going to clobber you”
No wonder we are haemorrhaging wealthy taxpayers: According to Bloomberg Data, fully half our billionaire wealth has left, or reduced its ties to the UK, since 2024.
Just when we need their investment, we’ve driven them overseas with mansion taxes, the international reach to all their assets for inheritance tax, some very loose talk by ministers arguing for wealth taxes and, just to speed them on their way, future exit taxes.
This is already the highest tax raising Parliament ever, and the worst Parliament on record for disposable income.
Then, in the last few weeks the Prime Minister has lobbed a hand-grenade into the mix: the prospect of reintroducing Freedom of Movement with the EU (despite have promised the voters of Makerfield to entertain no such thing). Nothing could be more calculated to keep our young people in benefit dependency than sucking-in European labour.
But, as the PM says, he is constrained by Labour’s 2024 manifesto. So, despite a huge majority and 3 years to run, all his big ideas await a new voter mandate, that’s why the budget cleared the decks for one soon.