What's wrong with the Budget? A political economist gives his verdict

I have been listening to and watching budgets in the House of Commons since broadcasts of them began, and have been following them in the press for longer than that, beginning in the 1970s. For the last decade, I have been a regular broadcast and media commentator on them. People get their kicks out of the weirdest things. For me, it turns out to be budgets. 

That, then, brings me to yesterday, and Jeremy Hunt’s latest Budget effort. This had the most tortured introduction to a budget that I think I have ever heard, somehow trying to link the Budget to Muslim soldiers who had served in the Second World War. That made no sense, but that set the scene for everything that was to follow, including the truly appalling jokes, which, even by the very low standard set by other chancellors, were very weak. 

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So too was the delivery weak. Rumour has it that there might still be another budget to come from this government, but Jeremy Hunt felt demob happy yesterday, and quite indifferent to what he was saying. There was no fire, interest, or passion. 

But then, he had nothing interesting new to say. For the first time ever, every single major budget decision has been leaked in advance. The media interviews that I did yesterday morning, before he Hunt had ever said a word, covered everything of significance that he had to say. There was nothing to add after he’s made the speech. That was quite astonishing. 

We knew, for example, that he was going to cut National Insurance by 2p. 

We also knew that fuel duty was to be frozen. 

And we knew that he was going to play silly political games with Labour, and finally close off the non-domicile rule, not because it was the right thing to do (which it was) but because it puts a spanner in Labour’s electioneering. 

We also knew that there would be a lot of very petty announcements about spending, none of which would add up to very much, and none of which would help any devolved government, local authority, business or person in need to make ends meet in any meaningful way. 

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The claim that taxes were being cut was predictable, and blatantly untrue. National Insurance went down. Overall other taxes will, however, rise over the next few years. Income tax to be paid in proportion to earnings will, in particular, increase significantly between now and 2029 unless Labour or the SNP, depending on who is in office in Scotland, find ways to overcome the massive tax problems that Jeremy Hunt has left for them. 

Despite all this though, even in the middle of all the mess that Hunt was creating he managed some giveaways to the best off. Capital gains tax on property sales will fall whilst those who can save up to £25,000 a year can now put that amount into ISA accounts each year, and get a tax subsidy from the government to do so. I can’t see that many people rocking with excitement at that prospect. 

I can feel them seething in anger that almost nothing was done to help those facing poverty. And because he did almost nothing about this issue in England, Scotland gets no extra money to do so either. That is how crass the system is. In fact, as I recall it, Scotland only got one mention in the speech, as if it was an afterthought, but then, almost everything in this budget was.  

Having listened to so many budgets, over so many years, from so many chancellors, there is one thing that I can genuinely say that most of them have in common. That is that most chancellors try to weave some big idea through the whole of a budget so that people can understand what a government is trying to achieve. The only thing that was apparent from yesterday’s Budget was that this is a government that is so out of ideas that it has already begun to borrow those from its official Opposition in Westminster. The Tories really are begging to be put out of their misery, and to be relieved from the responsibility of delivering any more budgets for a long time to come. 

Try as I might, I really can find almost nothing good to say about what Jeremy Hunt did yesterday. My only hope is that I never have to hear him do another Budget. I can’t say that I am looking forward to hearing Rachael Reeves performances if, as seems inevitable, she gets her turn at this job. But, even she might be better than Hunt. For that one small mercy, I am truly grateful.