John Healey and the Emperor Nero do not have much in common. Yet the Roman emperor has given the Chancellor the perfect epitaph for his first Budget. Today’s statement contained 98 measures – a record high – but the average value of each scorecard measures is worth a record low. This was the Nero Budget: plenty of fiddling all while the British economy burns. As one Labour MP put it at the conclusion of Healey’s speech: ‘That’s the end of 40 years of neoliberalism?’
The only thing surprising about the Chancellor’s speech was how few surprises there were
The only thing surprising about the Chancellor’s speech was how few surprises there were. For all the talk about fewer leaks this year, much of Healey’s speech found its way into the papers, right down to his move to take tariffs off gherkins.
The City will be breathing a sigh of relief that the bank surcharge will only be hiked by 3 per cent – the single biggest revenue-raiser from today’s statement. There was the obligatory talk around welfare – though nothing will be announced until Alan Milburn and Stephen Timms deliver their reports next month. Policy wonks will be intrigued by Healey’s claims on fiscal devolution: from next year 20 per cent of business rates revenues will go to mayors and, from 2028, a share of income tax receipts will go to mayors as well.
The big reveal from the Budget was that 20 million households in bands A to D will get £100 in support for energy bills, a move that will be welcomed by Labour MPs ahead of an expected rise in the energy price cap. Predictably, Healey’s announcement led to the government website crashing as thousands of voters stampeded there to check if they benefit from this munificence. This move, along with the extension of fuel duty restraint and a VAT cut on electricity bills until next July, will do nothing to deter talk of an early election. Healey and Burnham seem determined to keep their options open. A tell-tale sign of elections are red box giveaways, followed soon after by takebacks – the ‘pots and pans’ Budget of 1955 being a classic example.
For a man who has spent thirty years dreaming about this day, Healey’s delivery was surprisingly poor. The Chancellor stumbled over his script throughout his hour-long speech, butchering the pronouncing of ‘Aldershot’ to include an expletive at one point. The Tory benches, directed by the lusty Jack Rankin, were in fine voice, mocking Healey every time he tripped up. The most enjoyable Freudian slip was when Healey welcomed the green light for Jackdaw, a decision which he said had been ‘opposed’ by the Energy Secretary, rather than ‘approved’. Laughter ensued from the Opposition.
The best line of the day was delivered by Kemi Badenoch, giving the traditional response by the Leader of the Opposition. ‘The Prime Minister came in promising that he would “reverse 40 years of neoliberalism”. Instead, we got 4p off gherkins.’
This summed up the dilemma for Burnham and Healey. Move too quickly and risk spooking the markets; move too slowly and risk dashing their party’s hopes. The instant market reaction is a cautious thumbs up. But for those who hoped today would mark the start of something new, the Budget report by the Office for Budget Responsibility makes for sober reasoning. Growth slashed, borrowing up, welfare soaring and the landlord sector set on fire. Rather than the start of a radical new politics, today was the continuation of a tired old trend: lots of promises, plenty of cans being kicked down the road.
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