Great hopes were invested in Andy Burnham when he became prime minister in July. He went big on the failings of 40 years of neoliberalism, emphasised the need for Britain to start making things again and promised growth in every postcode. Back in the summer, John Healey’s first budget was seen as an opportunity to start delivering on these ambitions, but it has been clear for some time that it wouldn’t do so.
The road to the New Jerusalem – judging by the chancellor’s “breathing space” package – will be a slow and arduous one. Healey has taken what he inherited from Rachel Reeves and performed some minor tweaks. Not so much a revolution as continuity Keir Starmer.
As has been the hallmark of Burnham’s first 100 days in Downing Street, there was plenty of activity in the budget but the slew of measures – almost 100 in all – was a hotchpotch and had no real semblance of a strategy being fleshed out. Not many budgets linger long in the memory and it is unlikely that Healey’s will break with this tradition. In essence, it has bought Healey and Burnham some time.
For the moment they can argue that the budget was just part one of a three-stage process, to be followed by the government’s 10-year-plan and next year’s spending review. They need to use that time wisely or the glitzy PR will cease to impress. There are, of course, reasons why the chancellor played it safe.
Energy prices have rocketed since the US and Israel launched their war against Iran in late February. The consequent higher inflation has resulted in higher interest rates for mortgages, business loans and government borrowing. Optimism about an early resolution to the war is fast fading.
Indeed, the prospect of an intensification of the conflict after next week’s US midterm elections has led to a fresh surge in the cost of crude oil and gas in the past couple of weeks. The modest help provided in the budget to reduce energy bills will be dwarfed by the expected price increases in January. A tough winter lies ahead.
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