And that is not just because most of it was leaked in advance…
What an earth did commentators think Labour was going to do? It was obvious from the start of this government, hidden by all parties during the General Election, that better public services or even maintaining them as they are would involve higher taxes.
It was a brave (many might say high risk) budget. Nobody likes higher taxes, but the shortfall in public finances merited them.
Asset price inflation after years of quantitative easing has made many people better off than perhaps they expected. The last few years exacerbated by inflation have made it tough for those at the bottom of the ladder. Add in covid and the impact of the Ukraine war, and there was always going to be a reckoning.
The Tories should never have cut employees’ NI, and now employers have to make up the difference. It is quite simply a tax on jobs, and this is where this blog parts company with the government. All parties blather on about small businesses being the backbone of the economy, yet both parties have stuffed them in recent years. Labour shouldn’t have boxed themselves in and reversed the Tories’ cut. Both parties are as bad as each other.
However, one hopes the Chancellor sticks to her guns and keeps the budget intact from whinging pressure groups. The pain might as well be felt now.
The real reckoning is whether the government spends its revenues competently, whether economic growth accelerates accordingly, and whether there is room to cut taxes selectively in 4 years’ time against the backdrop of improving public services.
Umm… We had better hope Labour succeeds because there are few alternatives. The Tories will be weak opponents. In the most inconsequential election of the year, they will almost certainly vote Kemi Badenoch as Leader tomorrow and the odds of her surviving through to the next election are only a little lower than Labour getting the economy right.
Fingers crossed, but Hobson’s choice indeed.
Inside Right Politics 