- Published
John Healey talked of charting a new course for Britain, but this Budget was more about course-correcting than charging down a new path.
asserted
Budget → publish → path
It was abundantly clear that the financial fallout from that conflict in the Middle East has hampered the finances of households and businesses – and the government's ability to help.
asserted
fallout → hamper → households
While the government targeted those impacted by higher energy and fuel bills, the "breathing space" it aimed to provide was limited; it is a pill that doesn't fully alleviate the pain.
The most telling evidence was that official forecasters predict that while earnings will rise, that is not compensating for higher prices and taxes.
asserted
that → target → prices
Even after the extra help is taken into account, households' incomes after inflation and tax are set to be typically lower across the next two years than the start of the parliament, a sign of how much the war has blown prosperity off course.
asserted
war → take → course
But it can't be all be blamed on the war.
asserted
it → blame → war
Taxes haven't helped.
asserted
Taxes → help → ?
Although there were few major measures aimed at households, the policy of previous chancellors of freezing the thresholds at which different rates of tax on income apply - fiscal drag - has been maintained in the background, scooping more money out of pay packets.
asserted
rates → be → packets
Overall, this Budget has the tax burden - the proportion of the nation's income going to the tax office - rising to a new historic high of 38.6%
However, a more generous package of help would have been hard to pull off.
asserted
package → have → help
The impact of higher inflation and debt have increased borrowing costs by £14bn in the past year alone.
asserted
impact → increase → year
The Chancellor had to prove to the markets which lend the government money that he has a plan to bring down future debt to avoid those costs climbing further.
asserted
costs → have → debt
As it stands, debt interest repayments are due to be £160bn in 2032, more than double the amount spent on schools in England.
asserted
repayments → stand → England
And the plans Healey has unveiled already eat into wiggle room he has within the public finances.
asserted
he → unveil → finances
He says he was right to do so - that's what such safety margins are there for - in times of strife.
asserted
margins → say → strife
But the great uncertainty that remains made going further very risky.
asserted
going → remain → ?
Energy prices remaining high, for example, could easily chew up all the spare cash.
uncertain
prices → remain → cash
So the result was what some have termed a beige, safe Budget.
asserted
some → term → what
As Healey strove to prove his fiscally sound credentials, there wasn't even the customary rabbit pulled out of the hat, the end-of-speech sweetener.
asserted
Healey → strive → speech
The markets seem reassured – even if some of his tax raising plans involve clamping down on loopholes and those not paying the right tax, which is always highly uncertain.
So the chancellor appears to have bought himself some breathing space.
asserted
chancellor → seem → space
But that means some big questions have been postponed until another day, not least on public services.
asserted
questions → mean → services
Higher-than-expected inflation may mean that if areas such as health and defence are prioritised, budgets for some other "unprotected" areas – justice and higher education for example – are set to lag behind inflation after 2028.
uncertain
budgets → expect → 2028
There was a hint too from John Healey that he'd tap into some of those budgets to help out defence spending.
asserted
he → be → spending
To maintain those budgets in 2030 would means finding tens of billions of pounds.
asserted
maintain → maintain → pounds
And issues around the other big area of spending – welfare – remain unresolved.
asserted
issues → remain → spending
Between 2025 and 2032, spending there is set to increase by £100bn.
asserted
spending → set → 100bn
The official forecasters also noted the rapid rise in sickness and disability caseloads since the start of the pandemic.
asserted
forecasters → note → pandemic
They warn if that trend continued, spending on such benefits would rise by a further £13bn.
asserted
spending → warn → 13bn
Any suggestion of welfare reform has been postponed until the forthcoming review into the plight of workless young people.
asserted
suggestion → postpone → people
Even though first-time buyers are set to get more help, their first home may be more elusive.
uncertain
home → set → help
Between regulation and higher costs – in part, related to the war - the OBR estimates that 190,000 fewer homes will be built by 2032 compared to what it thought in March, a significant setback.
asserted
it → relate → March
So the chancellor may have unveiled 98 (relatively small) measures but the to-do list gets longer.
uncertain
list → unveil → measures
With his official forecasters warning that, in a very uncertain world, his finances face exceptional risks, playing a wait-and-see game feels like a prudent move.
asserted
playing → warn → move
The risks go both ways: the OBR points out that a swift resolution to the war and an improvement in the economy could spell a significant boost to the public finances.
uncertain
resolution → go → finances
So the chancellor has more reason than most to keep his fingers crossed that happens rapidly.
asserted
that → have → fingers
For as it stands, the official forecasters say incomes after inflation, living standards, are set to be only 1% higher at the end of the decade than at the start.
asserted
incomes → stand → start
A series of economic shocks outside out control could thwart plans to turbo-boost prosperity .
uncertain
series → thwart → prosperity
And as today shows, breathing space only extends so far.
asserted
space → show → ?
The Aporia
