The country braces as the Chancellor comes for seconds…
When the Chancellor stepped up to the despatch box last Autumn to deliver the first Labour budget in over 14 years a clear statement of intent was made: to wreck any chance of a prosperous Britain.
I will not rehearse the horrors that were unleashed at that budget, but the takeaway from that fiscal event was that Labour were, and still are, willing to renege on their promise to the electorate – with this November being no exception.
Going into this budget, the economic outlook is bleak for Reeves is already bleak. Inflation is nearly double the 2% target, and public finances that are unforgivably further in the red due to the mismanagement of this Labour government.
Do not fall for Labour’s blame game: the choices in the last and upcoming budget are of their doing and they must take responsibility for it.
Image: The Chancellor attends the Regional Investment Summit – HM Treasury / Kirsty O’Connor
Some of the recent revelations as to what measures are actually going to be announced by the Chancellor have reaffirmed that this country is not going to see an upwards economic trajectory under this Labour government; with Reeves expected to look to a series of prosperity dampening levies and tax rises that will undermine growth.
It’s hard to say which of the rumoured measures would be the worst for economic prosperity – however the messaging that imposing a wealth tax sends must be addressed.
I get it – to those on the left a wealth tax basically looks like free money. Money that could be used elsewhere, such as mitigating the failures of our dilapidated public services. What it achieves instead is a signal from the government that there is a ceiling to hit in this country.
The rhetoric it conveys is damaging to the optimism of our own people. Even if the hardworking people of this country are not directly thinking about it, which the majority will not, they subconsciously know that there is a roof that they can hit before the state starts to penalise them for putting in their own hard yards – on top of the income tax and national insurance they are already paying.
It can also prove to be a slippery slope to go down for our appeal on the global stage. We cannot expect talent from other countries to come to our nation if they know that they will be better off in other countries who understand the concept of graft and aspiration.
Introducing even a minor wealth tax opens a “black hole” where the visible tax gains distract from the unappreciated, yet vital, national optimism. This sets a harmful precedent that could significantly damage our nation’s future prosperity.
A crucial context to view this budget in is the collapse of the welfare reforms a few months ago – It is hard to have trust in Labour’s management of the economy when they themselves do not truly know what is on the balance sheet.
The chancellor may provision certain savings across the board but cannot actually be certain she will be able to make them when she looks to the backbenchers – with the rift between the government and parliamentary Labour Party still unresolved.
Image: The Chancellor attends the Regional Investment Summit – HM Treasury / Kirsty O’Connor
The gravity of that rebellion was undeniably strong and the effects of it can still be felt months later, with the backbenchers knowing they can inevitably force a U-turn on any budget measures they are discontent with against a weak Downing Street.
The optics ahead of this budget certainly point to why it is being delivered so late, as the treasury could be looking to do its due diligence to ensure that the necessary cuts could be made without any political headaches, with the margins being especially tight.
This also points to why the Chancellor is singling out measures such as wealth taxes in a bid to make savings that will appease the parliamentary party.
It is quite staggering that this power dynamic between the government and the backbenchers has been able to persist, with times like this proving why Prime Ministers are usually seen to promptly find a remedy to the upheaval.
Whatever comes from this budget, there will be fear throughout the country that they will not be within the chancellor’s grasp as she scrambles to clean up the mess that she created – if her backbenchers allow her to.
Featured Image via HM Treasury / Kirsty O’Connor
