Matthew Bowles is senior policy researcher at the Prosperity Institute.
It was rather appropriate for John Healey to deliver a Budget that was, by almost every metric, a little dull. With the City pricing in the possibility of an early election, a Chancellor keen to avoid upsetting the markets like his predecessors was never likely to produce anything too adventurous. The result was a package of some minor short-term relief and another post-war record-breaking tax burden.
The Leader of the Opposition, on the other hand, was in considerably livelier form. Describing Rachel Reeves handing over the keys to Number 11 as a “hospital pass”, she accused Healey of delivering a “welfare first” Budget, designed to keep the tough decisions at bay until a time when action becomes more politically convenient. Given the last decade, I’m not quite so sure that time will ever arrive.
It was arguably on defence that Badenoch managed to land her most serious blow. Previously, Healey resigned as defence secretary, with the stated reason being the Government’s failure to provide a credible funding settlement for the armed forces. His resignation was presented as an act of principle, rather than a more cynical case of Healey playing Brutus to Starmer’s Caesar as he eyed up a future promotion.
Yet there was precious little in this Budget to explain how Britain will meet its commitment to spend three per cent of GDP on defence by 2030. It would help if we had a coherent defence strategy, as the maritime-first one proposed this week by the Prosperity Institute, but there is little sign of that.
The Budget Healey presented was a Coward’s Charter. The Government appears perfectly content with stockpiling difficult decisions for another day. The Institute of Fiscal Studies (IFS) warned that meeting existing spending pressures alongside the damage caused from higher inflation could require substantial additional funding. Relying on spending cuts ministers have no intention of delivering would make the plans as the IFS rightly stated, a “work of fiction”.
There was nothing to suggest a detour from this path. If he truly believes defence spending must rise, then he must first announce it, and then set out how he will fund it. Otherwise, the cynical explanation for his prior resignation risks becoming more believable.
The rest of the Budget was hardly more inspiring. Households in council tax bands A to D are to receive £100 towards their energy bills, at a cost of £2.6bn. Nobody is going to turn down a ton dropped straight into their bank account. But it is a blunt instrument, offering the same payment to households with a wide variety of circumstances.
Temporary relief, however, does little to address underlying causes of high energy costs, such as the green levies set to add the equivalent of £1,400 a year to household energy costs by 2031. When the Conservatives attempted a similar policy, a rebate under Rishi Sunak, price rises quickly threatened to swallow up the benefit.
The additional three per cent bank surcharge (from three to six per cent), that is intended to fund the energy payment is yet another example of the Government presenting a tax as if it were a cost-free solution. Banks may be the target on paper, but who will end up paying? You and I! Taxes on businesses always get passed on to consumers. With banks, this will be reflected in the rates offered to borrowers and savers, and perhaps the number of bank branches they can afford to keep on our highstreets. Healey can’t ultimately choose who foots the bill; only the party to whom it is initially delivered.
“The Prime Minister came in [to office] promising he would reverse 40 years of neoliberalism. Instead, we got four pence off gherkins”, the Leader of the Opposition proclaimed. Quite. For all the grand rhetoric about transforming Britain, the Government’s answer has once again been to tinker, and tinker as if it had a nervous twitch. The same as before, but slightly worse. As Sky News’ Ed Conway pointed out swiftly after the announcement, there was a record number of measures (98), but the average value of each scorecard measure is a record low.
For all the necessary criticism Badenoch dished out, one line deserves some scrutiny: “the harm has already been done”. It was a fair attack on Labour’s record, but a rather convenient one for a party who governed for fourteen years before leaving office with public debt around 100 per cent of GDP and a tax burden crippling worker and business alike. Indeed, of the five years that Income Tax thresholds have been frozen, over three of them were under the Tories’ watch.
The Conservatives cannot continuously blame shocks and uncontrollable events for their poor record in government. The necessities of a Lib-Dem coalition, the war in Ukraine, COVID-19, even Gordon Brown – we’ve heard the excuses repeatedly. They certainly played a role but were not the primary cause of what in 2023 became the single largest tax-raising parliament on record.
Healey’s rather dry, monotone presentation meant that even a mild addition of colour in Badenoch’s response would draw positive attention. No doubt it jerked those on both sides out of a slumber. The Chancellor’s reference to Liz Truss’s new book felt like a well-worn punchline in search of a fresh target.
Yet while Badenoch was confident and sharp, an opposition leader can only do so much kicking of a ball into an open goal. The jury’s out on whether she can turn her rhetorical wins into a credible alternative. This might have to be done sooner rather than later, with Healey’s Budget having all the marks of one presented in the fourth year of a Parliamentary term – one just before an election.
Matthew Bowles is senior policy researcher at the Prosperity Institute.
It was rather appropriate for John Healey to deliver a Budget that was, by almost every metric, a little dull. With the City pricing in the possibility of an early election, a Chancellor keen to avoid upsetting the markets like his predecessors was never likely to produce anything too adventurous. The result was a package of some minor short-term relief and another post-war record-breaking tax burden.
The Leader of the Opposition, on the other hand, was in considerably livelier form. Describing Rachel Reeves handing over the keys to Number 11 as a “hospital pass”, she accused Healey of delivering a “welfare first” Budget, designed to keep the tough decisions at bay until a time when action becomes more politically convenient. Given the last decade, I’m not quite so sure that time will ever arrive.
It was arguably on defence that Badenoch managed to land her most serious blow. Previously, Healey resigned as defence secretary, with the stated reason being the Government’s failure to provide a credible funding settlement for the armed forces. His resignation was presented as an act of principle, rather than a more cynical case of Healey playing Brutus to Starmer’s Caesar as he eyed up a future promotion.
Yet there was precious little in this Budget to explain how Britain will meet its commitment to spend three per cent of GDP on defence by 2030. It would help if we had a coherent defence strategy, as the maritime-first one proposed this week by the Prosperity Institute, but there is little sign of that.
The Budget Healey presented was a Coward’s Charter. The Government appears perfectly content with stockpiling difficult decisions for another day. The Institute of Fiscal Studies (IFS) warned that meeting existing spending pressures alongside the damage caused from higher inflation could require substantial additional funding. Relying on spending cuts ministers have no intention of delivering would make the plans as the IFS rightly stated, a “work of fiction”.
There was nothing to suggest a detour from this path. If he truly believes defence spending must rise, then he must first announce it, and then set out how he will fund it. Otherwise, the cynical explanation for his prior resignation risks becoming more believable.
The rest of the Budget was hardly more inspiring. Households in council tax bands A to D are to receive £100 towards their energy bills, at a cost of £2.6bn. Nobody is going to turn down a ton dropped straight into their bank account. But it is a blunt instrument, offering the same payment to households with a wide variety of circumstances.
Temporary relief, however, does little to address underlying causes of high energy costs, such as the green levies set to add the equivalent of £1,400 a year to household energy costs by 2031. When the Conservatives attempted a similar policy, a rebate under Rishi Sunak, price rises quickly threatened to swallow up the benefit.
The additional three per cent bank surcharge (from three to six per cent), that is intended to fund the energy payment is yet another example of the Government presenting a tax as if it were a cost-free solution. Banks may be the target on paper, but who will end up paying? You and I! Taxes on businesses always get passed on to consumers. With banks, this will be reflected in the rates offered to borrowers and savers, and perhaps the number of bank branches they can afford to keep on our highstreets. Healey can’t ultimately choose who foots the bill; only the party to whom it is initially delivered.
“The Prime Minister came in [to office] promising he would reverse 40 years of neoliberalism. Instead, we got four pence off gherkins”, the Leader of the Opposition proclaimed. Quite. For all the grand rhetoric about transforming Britain, the Government’s answer has once again been to tinker, and tinker as if it had a nervous twitch. The same as before, but slightly worse. As Sky News’ Ed Conway pointed out swiftly after the announcement, there was a record number of measures (98), but the average value of each scorecard measure is a record low.
For all the necessary criticism Badenoch dished out, one line deserves some scrutiny: “the harm has already been done”. It was a fair attack on Labour’s record, but a rather convenient one for a party who governed for fourteen years before leaving office with public debt around 100 per cent of GDP and a tax burden crippling worker and business alike. Indeed, of the five years that Income Tax thresholds have been frozen, over three of them were under the Tories’ watch.
The Conservatives cannot continuously blame shocks and uncontrollable events for their poor record in government. The necessities of a Lib-Dem coalition, the war in Ukraine, COVID-19, even Gordon Brown – we’ve heard the excuses repeatedly. They certainly played a role but were not the primary cause of what in 2023 became the single largest tax-raising parliament on record.
Healey’s rather dry, monotone presentation meant that even a mild addition of colour in Badenoch’s response would draw positive attention. No doubt it jerked those on both sides out of a slumber. The Chancellor’s reference to Liz Truss’s new book felt like a well-worn punchline in search of a fresh target.
Yet while Badenoch was confident and sharp, an opposition leader can only do so much kicking of a ball into an open goal. The jury’s out on whether she can turn her rhetorical wins into a credible alternative. This might have to be done sooner rather than later, with Healey’s Budget having all the marks of one presented in the fourth year of a Parliamentary term – one just before an election.