Today’s may be a generationally consequential Budget, and not just because of the striking optics of the first-ever woman Chancellor and Labour’s first Budget in fourteen years. But because it may shape the political and economic terms for arguably the next decade.
While the numbers and details will take some time to forensically interrogate, the broad brush of the government’s economic philosophy were very much painted in primary colours.
A new politico credo gets its first outing
Rachel Reeves is creating her own political credo, a 21st century redrawing of social democratic economics that puts growth based on investment alongside pledges to repair and reform public services. Paired with opposition to profligate spending and austerity in equal measure and a bold assertion of the need to increase borrowing and taxation knitting it all of it together.
A speech with three parts
The speech amplified the three main messages the government wants to articulate. Firstly, that the inheritance from the last government is worse than feared. Secondly, to establish the new government as fiscally responsible. Thirdly, to ensure that the choices made in the Budget are viewed as part of a long-term plan to grow the economy, improve public services and leave working people better off.
The summer they could have had
The Budget comes at the end of a month of frenetic, and reasonably successful, activity for the government. They’ve published their Employment Rights Bill, the Industrial Strategy, a major NHS Reform consultation, and hosted their International Investment Summit. There were logistical reasons why it wasn’t possible, but this is a month of activity of the type that the government may have hoped to have rolled out over the Summer.
Yorkshire may be seeing more of Rishi Sunak
Today may have been the last time we hear Rishi Sunak make a significant speech in the Commons. One of his regrets may be that he didn’t hold the General Election on the date that many had predicted – tomorrow.
If I don’t see it, I won’t believe it
Public mood is uncertain and volatile, and the Budget sought to meet that sentiment head on by championing ‘change you can see’. That is why there’s so much focus on some of the granular specifics, the ability to get a GP appointment, the name-checking of specific school projects, infrastructure investment, planning reform, and the uplift in the National Minimum Wage. The government will be hoping that this focus on tangible improvement can overcome public cynicism.
It’s now clear where Labour stands
Today’s Budget is arguably the most significant Chancellor’s speech since that of Nigel Lawson’s in the late 80’s. The Chancellor sought to signal a clean break with the recent past, identify a social democratic fiscal orthodoxy around investment and reform, while at the same time, reassuring the markets that UK debt and investment environment is a benign one. And while there will be significant push back on individual measures, Labour MPs will be cheered by the sheer scale of today and that they at last feel they have tangible policy content to advocate for.
The Chancellor’s speech was a self-confident performance, backed by almost 400 of her own MPs. And while today is mostly about economics, it also feels like a significant moment in politics. She felt emboldened enough to echo Tony Blair’s response to the question of his top three priorities, summarising her approach as ‘Investment, Investment, Investment’.
This will be a Budget that will be remembered as a significant moment. Today, the government set out its approach, a dash for growth based on investment and reform.
