John Healey’s budget today was nothing short of disappointing, as the Westminster bubble continued its long-held strategy of minor adjustments, underwhelming announcements, and technical changes aimed at scoring political points rather than benefiting households. There is only one real takeaway from this budget: it is a budget for an election, not for a government.
The most notable impacts for a regular household were announced ahead of the budget: a tariff cut on 100 of the most common supermarket goods expected to save the average family a whopping £21 per year. Despite the OBR forecasting in the budget an inflation increase this year to 3.1%, I am sure households will welcome being able to claw back £21 from their shop, a massive 40p on the weekly shop. Indeed, the largest change households are likely to notice is that there is yet another year of ISA changes, as households must once again wrap their heads around the thinking of the Treasury. The Lifetime ISA, it turns out, survived less than a decade before being scrapped in favour of the First Time Buyer ISA, a mechanism operating very similarly, showing once again that under Burnham programs cannot meaningfully change, only be slightly tweaked for the sake of a headline. Critically, the downgrade on a Cash ISA from £20,000 to £12,000 introduced under Rachel Reeves will not take effect, a policy so ill thought out it has now been scrapped before it even began. This merely begs the question, how can Britain possibly function if it is to reckon with a change in policy like a revolving door?
The major announcements of Burnham’s Budget today suggest the answer is simply that Britain shouldn’t. The Chancellor seems incapable of committing to any project beyond July, raising the question of whether this is a budget for the next year or a budget until the next election? VAT cut to energy bills, an admittedly helpful 5% saving on each bill, will be extended a whopping 3 months until July next year rather than its prior forecasted end in April. Similarly, the existing fuel duty cut will be extended to the same period, also ending in July next year, which is worth an average £2.75 at the pump. These are, of course, welcome changes, at least if they were not offset by an average £30 rise in the cost to fill up your car since February or the 4% increase in the energy price cap this month. This says nothing for the estimated change coming in January to the energy price cap of a potential 20% rise costing £250 per year for the average household. Healy has unconvincingly combated this with a £100 payment to houses in council tax bands A-D, hardly help when you intend to raise bills by more than the aid amount.
The Burnham Budget notably contained no vision for fundamentally changing these issues to ensure the long-term stability of the economy and of the country. Credit should be given to Healy for forcing the approval of the Jackdaw gas field last week, a move apparently set to benefit the country to the tune of £2.9 billion. Imagine the benefit had the government listened to the Conservatives and approved earlier instead of listening to the climate zealotry of Ed Miliband. Environmental issues are of course important, but would the nation prefer burning British gas and reaping the benefits or pretending to be green and expending billions a year on Middle East reserves for the sake of appearances? Will the government now pretend it is anything less than irresponsible to block the Rosebank field expansion, or must they continue to cost the British people many more billions for the sake of ideological demands?
British businesses are instead left crushed under this rising burden of higher regulation, higher bills and lower profits. No long-term energy measures were brought in at the budget with the idea of growing the economy or lifting some of this burden on hardworking businesses. In an era when Nissan, on our own back door, feels the need to sell an entire production line to the Chinese just to keep the lights on, how can the Chancellor possibly ignore the cries for help from British businesses? Of course he will shout that the business rates relief threshold will rise to £18,000 from £12,000, but this is exclusively for the hospitality and retail sectors, so the local plumber, electrician or accountant will still have to pay the bill for this reckless government spending. Indeed, with rates having been frozen for nearly a decade, the 50% rise in the threshold for hospitality is in reality a rise merely to bring it in line with inflation.
As a Conservative, I acknowledge that, with a focus on the budget presented today, I am appearing overly anti-government, offering no plans of my own. In contrast, Badenoch set out a series of long-standing Conservative plans to cut more than £70 billion from expenses to help reduce the deficit, control the spiralling interest rates and invest in more jobs for the growing employment crisis. I understand the country does not seek to hear the hauntings of the last decade and more screens of austerity, but instead of an age in which the government spend £20, maybe £30 billion on interest repayments, that figure has now reached £1 in every £13 spent by the government, a figure of more than £100 billion. As Badenoch pointed out, this is almost double the annual defence budget, a shameful figure considering Healy once again dodged the issue of meeting the 3% promised by 2030 or 3.5% by 2035 in the NATO commitment to defence. With Britain, for the first time in decades, not having conventional submarines at sea, unable to fund training of its own armed forces and having to rely on European aid simply to staff command posts and naval headquarters, the nation must look at this binary choice. A responsible, fiscally minded Conservative government which has somehow managed more concrete spending plans in opposition than a Labour government intent on rising welfare, soaring expenses and declining business.
£333 billion is to be spent on welfare this year; the budget now believes by 2030 this figure will be £407 billion. We as a nation cannot afford to continue this pace of growth set by failing Labour standards even as their backbenchers clamour for more welfare. This is of course after the estimated £15 billion to be saved annually by 2030 on Labour’s scrapping of the triple lock. Selling out pensioners who have paid into the system for decades will instead fund benefits to working age families, with the average bill having risen to an average of £4000 per household just on working age benefits. Of course, others will scream of youths taking advantage of this, but regrettably the budget has shown anything but. The graduate job opening market has declined by 50% in just one year, as millions now leave education with nowhere to go, and all the while paying for the privilege, as now 3 of the 5 possible student loan repayment plans are below what the living wage will be next year. Sold to students as the price of a cup of coffee, the Labour government has betrayed graduates, frozen repayment thresholds and all but forced repayment at extortionate interest rates. What did this budget have to help graduates facing bipartisan calls for reform?
Not a single penny, as this is for working people and not for the inevitable crusade of more benefits; this government has no sympathy.
This budget has sent a few simple messages. Growth may be up this year, an impressive 1.6% given the slog of the economy and anti-business measures brought in by Starmer, but next year it is down yet again, managing a mere 1%, not a good look when inflation hit 3.5% this month. Allegedly, the deficit will be down by 2030 according to the OBR, on the assumption Labour embarks on no new spending, no new investments and resigns the country to stagnation. Despite all this, the fiscal headroom has already declined to £15 billion, a third chopped off in less than a year. By 2030 this headroom will be all but decapitated, forcing yet more tax rises. This lack of a plan is nothing new, for 15 months the banking levy will double to 6% on top of the already 25% corporation tax, a message for growth and support of the largest single sector of the economy just a week after Barclays laid off more than 5,000 staff. Will this be for 15 months? Of course not; there is no such thing as a temporary tax rise under a Labour government, only more ways to raise tax and boost spending.
Conservative budgets when we were last in government were often controversial: the largest National Insurance tax cuts in British history brought to you by Hunt, a closing of the deficit brought to you by Hammond or the most controversial austerity championed by Osborn. Amid these controversies, we can take away lessons from them as a matter of fact. They lowered unemployment, they boosted growth, and they cut taxes on working people. Real benefits for real people despite an all too difficult world. The same message cannot be said for this Labour budget. Despite all this, with a massive 98 measures taken, hundreds of pages, and me reading for hours to find the most basic facts of this budget, I imagine many of you are reading this asking the same question I did. Is that it?
