No party tricks from the Chancellor at the Budget as long standing issues remain
If ever the Chancellor needed to pull a rabbit out of the hat, it was during yesterday’s Budget. While there was no neat party trick to cure Britain’s economic woes, John Healey’s statement at least sought to allay fears that this Labour Government would continue on the same path as Sir Keir Starmer’s administration.
Despite all the talk of a new settlement and Prime Minister Andy Burnham’s comments that Britain was “in hock to the bond markets” prior to entering 10 Downing Street, this was a largely steady Budget. A reflection that the Burnham-led Government does recognise the economic reality that the country faces.
The PM had promised to provide households that have had to endure a prolonged cost of living squeeze with “breathing space”.
The Chancellor looked to honour that pledge by announcing that millions of households will receive £100 to help with soaring energy bills. The energy bills support package will cost £2.6bn and will be paid for by raising taxes on banks and gambling firms.
Healey also announced that he will increase the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000, giving a tax break to 70,000 smaller firms.
Any support for small businesses and households is to be welcomed in these straitened times. But this Budget doesn’t fix, nor was it ever going to fix, the long standing issues that have paralysed the economy.
The enormity of the challenge is reflected by the fact that UK debt as a percentage of GDP was 40 per cent and now it stands at nearly 100 per cent.
The rising cost of borrowing is increasingly leaving Britain vulnerable against a backdrop of growing social and economic challenges.