A boring day in parliament… because all the budget measures mentioned this afternoon were well trailed for days. That is before the spectacular leak of the full budget by the OBR at least 30 minutes before the Chancellor spoke. More radical ideas floated over previous weeks which had the impact of damaging investment plans were in the end funked by the government. It is in a mess.
A mess of short-term revenue grabbing measures…
I wanted this government to succeed because it is all we have currently got to protect the UK from a populist surge. Patience is now wearing thin.
Ministers don’t understand business and had no idea of the impact of raising employers’ National Insurance in the last budget which has hit growth and employment. Dividend income taxes have now risen in this budget further damaging entrepreneurship. The tax advantages of pension salary sacrifices have also been cut when there is an overwhelming consensus people are not saving enough for their pensions.
A sly dig at people living in large, valuable houses by essentially doubling council tax will probably backfire as asset rich, income poor house owners’ revolt. Councils will probably see little or any extra revenue. Meanwhile, council debt has soared to £7 billion due to rising special needs education and social care costs. This figure needs watching very carefully. A disaster is about to unfold as the government avoids any long term policy solutions.
Only the increase in minimum wage rates and gambling taxes are remotely good news.
Under this Labour government, longer-term growth forecasts are down, and inflation forecasts are up. A lack of productivity growth remains unchallenged. Oh dear, indeed.
It is a good budget for those on benefits, precisely the opposite of policies needed for encouraging growth. The cap limiting households on universal or child tax credit from receiving payments for a third or subsequent child is to be scrapped from April whilst there is no indication of new initiatives to get any of the 9 million inactive people of working age back to work. Neither Starmer or Reeves wanted this reversal, but they are now in hock to their revolting backbenchers.
Labour governments mostly tax and spend more, they have no idea of how to encourage aspiration and unemployment normally rises. No change there then. If only there was a credible Opposition called the Conservative Party, focused on building back a reputation for economic competence rather than Reform-lite rhetoric…
Inside Right Politics 