In his first Autumn Statement four months ago, Jeremy Hunt was the undertaker who buried “Trussonomics”. In his first Budget today, he disinterred some bits of Liz Truss’s growth agenda, while trying to resurrect the Tories’ reputation for quiet competence.
But perhaps the most notable aspect of the Chancellor’s address was the return to his party’s historic habit of bodysnatching its critics’ best ideas from left, right and centre.
Karl Marx famously claimed “property is theft”, yet in many ways all politics is theft. And Hunt set about ruthlessly nicking all the bits of policy he and Rishi Sunak think they need to get Britain out of its downturn – and the Conservatives out of their polling doldrums.
The Chancellor lifted not only Truss’s plans for investment zones and childcare ratios, but also Keir Starmer’s plans for an extended energy guarantee, a windfall tax, the scrapping of sickness work assessments and skills training for over-50s. Even the Lib Dem plan for more free hours of childcare for one and two year-olds was in his swag bag.
There was certainly lots of good news in Hunt’s speech. The most significant was the Office of Budget Responsibility’s (OBR) assessment that his measures, combined with falling global prices, mean that the UK “will not now enter a technical recession this year”.
It was no surprise he trumpeted an extra 170,000 fewer people out of work compared to the Autumn forecast, plus OBR estimates that the Government will be “on track” to halve inflation, get debt falling and grow the economy.
Yet there remain some unavoidable negatives. On many measures, the NHS’s performance is the worst in a generation. Social care, schools and hospitals face historic staff shortages, and households face a cash-sapping energy efficiency crisis.
The power of political pilfering from your critics’ policies is undermined if the public feel that overall, this Government has been picking their pockets for years. With workers suffering the longest and deepest pay squeeze for 200 years (according to the Trades Union Congress), the long term hit to earnings has left many feeling short changed.
Most Budgets involve sleight of hand, and there’s no getting away from the hard facts of the big increase in Corporation Tax or the increasing numbers of people who have been dragged into higher tax bands.
While his dramatic abolition of the £1m lifetime allowance on pension tax will undoubtedly help to retain many senior NHS doctors, its application to all high earners means that the very richest have just been given a huge tax bung.
The real problem with much of Hunt’s prospectus was just how quickly the change can be delivered.
From the extra cash for levelling up to the childcare cash due to kick in by next September, for many it may all feel like too little, too late in time for the general election – due in October 2022. The new delays in delivering the HS2 rail line are of a piece with “jam tomorrow” more generally.
Indeed, Hunt often sounds like the “delay repay” Chancellor, offering temporary compensation to voters who may be sick of repeated cancellations on the journey to growth.
And one of the most worrying statistics buried today is that the OBR has actually reduced its forecasts for growth
for 2025, 2026 and 2027. Normal service on growth will not be resumed for years.
Hunt was also silent about the looming public spending cuts that are coming down the line. But he will have to face this problem during the next election campaign, which may involve selling voters yet more austerity and anaemic economic growth.
The Chancellor was keen to talk about the impact of Covid-19 and the war in Ukraine, but he was less open about the self-inflicted wounds of Boris Johnson’s botched Brexit deal (one of the main reasons for worker shortages and hits to science funding), the Truss premium on mortgages or the Cameron era of cuts, staff shortages and low growth.