On Friday, we had the long-awaited “fiscal event” which looked for all the world like a budget and sounded like a budget. It must therefore be concluded that it was intended to be a budget in all but name.
This was the new Prime Minister’s opportunity to put her mark on Government and to set out her stall ahead of the next General Election. If that was what she was doing, it must be said that very few budgets – perhaps not since Nigel Lawson’s recession-heralding budget of 1988 - have been so blatant in their bias towards those who are doing very well against those who are struggling to make ends meet from day-to-day.
While the support announced to help with rocketing energy costs is welcome insofar as it goes, the reality is the ‘new’ energy cap is still £2500, which far from being a ‘cut’, still represents a huge increase in household bills. The ‘equivalent support’ which was promised for those who are off-grid and use heating oil turned out to be a very paltry sum indeed and certainly far removed from any definition of ‘equivalent’ that you or I might understand.
Whilst energy prices double, the pressure on people across the UK is also being piled on by higher interest rates leading to higher mortgage costs and a loss of confidence in the housing market. Fundamentally, the choices made in the budget will ensure that the recession we all could see coming is now going to be deeper and longer than it needed to be.
Incredibly, having delivered the Budget on Friday and allowed for a few hours of questions, Westminster has immediately gone into recess once again. This, together with the pointed refusal of the Chancellor to publish any analysis from the Office for Budget Responsibility into his plans, means any parliamentary scrutiny and challenge over the consequences of the Chancellor’s actions will have to wait until the Party Conference season is over.
I think people have waited long enough already. We waited all summer for any indication help was coming while government business all but shut down as a result of the Conservative leadership contest. It’s not good enough and Parliament should be recalled to allow proper scrutiny of these proposals.
This needed to be a budget which offered help and hope to those worried about what bills might land on their doormat in the weeks ahead. Instead, we’re seeing tax cuts which disproportionately benefit the highest 10% of earners, and which the Resolution Foundation think-tank has reported will benefit London and the South East of England disproportionately in consequence
It also speaks volumes that out of all the groups they could have rushed furthest to help, they chose to reward city bankers suffering the indignity and privations of only being able to qualify for bonuses that are double their salary. Just how big – I wonder - will the bonuses now be for those city traders who profited out of betting on the resulting slump in the value of the pound as the financial markets responded to the madness unfolding in the Treasury?
The new Chancellor of the Exchequer, Kwasi Kwarteng, has an academic background as an economic historian. Will the legacy of the Chancellor’s fiscal statement be that for tens of millions of households the length and breadth of the UK, he has made any notion of a fair economy, history?