It risks turning Wednesday’s big speech into the Paddington bear Budget. The left of the Labour party, high on promises of ending 40 years of neo-liberalism, might have been hoping for a wealth tax, an exit charge, plus sweeping renationalisation of the utilities, but instead it looks like they will get something far more modest in tomorrow’s first financial statement from the new Chancellor John Healey: cheaper marmalade. Sure, that might be great if you happen to be a small bear from darkest Peru. But it won’t do anything to turn around the British economy.
Even the Treasury’s own calculations suggest that the changes will only save the average household £21 a year
From all the advanced leaks, it seems like Healey is planning a dull, do-no-harm Budget. Still, he has to say something to fill up an hour or so in the House of Commons. To help set a positive mood, the government has just released a plan to lift the tariffs left over from our membership of the EU on a whole range of things, including boiled sweets, toffees, and, yes, marmalade.
As it happens, there is nothing wrong with the idea itself, even if tariffs are usually a matter for the department for trade instead of the Chancellor. It is ridiculous that more than five years after we left the EU we still impose tariffs on items such as garlic, gherkins and chocolate-coated wafers and waffles. It is hard to understand why the trade officials in Brussels think it is so important to protect the domestic boiled sweets industry. After all, even Donald Trump, who keeps telling everyone ‘tariff’ is his favourite word, doesn’t go that far. But it makes even less sense for a relatively small, open economy such as Britain. They should have been lifted years ago.
Still, better late than never. Of course, it will make the task of rejoining the Customs Union, or indeed the EU itself, a lot harder, since it will mean the tariffs will have to be re-imposed again. The bigger problem, however, is this. It won’t make any real difference to anything. Even the Treasury’s own calculations suggest that the changes will only save the average household £21 a year.
The economy needs major, bold reforms if it is to start growing fast enough to create jobs, raise living standards, and finance the juggernaut of government spending. It needs planning reform, dramatically cheaper energy, simplified taxes that don’t destroy incentives, and a determined effort to bring welfare spending under control and get people back to work. Cheaper marmalade, or even boiled sweets, won’t make any difference to any of those issues – it is just a distraction from a government that is too timid to make any serious reforms.
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