Cuts to the bloated welfare bill and a plan to meet Britain’s defence spending commitments were missing from the Budget as John Healey kicked the tough decisions down the road.
asserted
Healey → meet → road
Despite howling calls from some Labour MPs, the Chancellor also backed away from wealth taxes in a safety-first Budget that opposition parties fear could pave the way for an early election.
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parties → howl → election
Kemi Badenoch branded it a ‘Budget for getting by’ as she slammed Labour for leaving Britain ‘overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system’.
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she → brand → system
Mr Healey delayed the difficult decisions needed to slash spending on sickness and disability benefits – set to cost £100billion a year by 2030 – as Labour awaits the outcomes of a series of reviews.
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Labour → delay → reviews
The Chancellor recognised ‘there is more to do’ on welfare reform but insisted this could not be done before the publication of major reviews into youth unemployment and disability benefits.
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this → recognise → unemployment
He confirmed the reviews by former health secretary Alan Milburn into the million young people not in education, employment or training (Neet), and by welfare minister Sir Stephen Timms into disability benefits, will report back next month.
‘This government will then set out our response before the end of the year, with a white paper and legislation to follow next year,’ Mr Healey said.
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Healey → confirm → paper
‘As the Prime Minister and I have both said, we will bring down the welfare bill, and we will do it in a Labour way.’
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we → say → way
Chancellor John Healey failed to set out a clear plan for Britain to meet its target of raising defence spending to 3 per cent of GDP by the end of the decade at the Budget
Mr Healey acknowledged ‘there is more to do’ on welfare reform but said he and Prime Minister Andy Burnham will bring down the benefits bill 'in a Labour way'
However ministers have already ruled out the Timms review identifying any savings and Mr Milburn has indicated that his proposals will not save any money before the end of the decade.
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proposals → set → decade
The Centre for Social Justice branded Mr Healey’s fiscal statement a ‘Fudge-it Budget’ that ‘leaves Britain’s welfare crisis unresolved’.
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that → brand → crisis
Joe Shalam, the think tank’s policy director, said: ‘The government has, for now, handed out a few sweeteners and fudged the hard choices until the next review.’
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government → say → review
Meanwhile the Chancellor also failed to set out a clear plan for Britain to meet its target of raising defence spending to 3 per cent of GDP by the end of the decade.
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Britain → fail → decade
Mr Healey quit as defence secretary in June over Sir Keir Starmer's refusal to commit to the 3 per cent target, saying it was the minimum needed to keep Britain safe.
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it → quit → Britain
But on Wednesday the Chancellor delayed the tough decisions needed to fund Britain spending 3 per cent on defence by 2030 until the spending review expected in autumn 2027.
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Chancellor → delay → autumn
So far, Labour has only committed to setting out a plan to meet the Nato target of spending 3.5 per cent of GDP on defence by 2035, but not the 2030 target.
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Labour → commit → 2035
Currently defence spending is only set to nudge up from 2.6 per cent to 2.7 per cent by the end of the decade.
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spending → set → decade
Mr Healey again committed to setting out a plan for 3.5 per cent by 2035 but said only that 3 per cent by the end of the decade would be a 'target'.
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cent → commit → decade
He told the Commons: ‘At the spending review next year, I confirm that I will set out the details of how we will meet our Nato commitment to spend 3.5 per cent of GDP on defence by 2035, with a target date for 3 per cent in 2030.’
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we → tell → 2030
Conservative leader Mrs Badenoch slammed Labour for failing to grasp that ‘if Russia launches an attack on NATO in the next three years, as the government's own intelligence suggests, we will be at war without the means to properly defend ourselves’.
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we → slam → ourselves
She added: ‘You can't have social security without national security.
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You → add → security
Because if you cannot defend your country, there will be nothing left to defend.
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you → defend → country
Mr Healey also resisted calls to raise capital gains tax on the sale of second homes, shares and other investments at the Budget, despite some briefing that it was under consideration.
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it → resist → consideration
Cabinet ministers Wes Streeting and Louise Haigh had both previously voiced support for raising capital gains tax – which is levied at 24 per cent – before Andy Burnham became Prime Minister in July.
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Burnham → voice → July
But the Chancellor resisted the calls after economists warned this would further damage Britain’s sluggish growth and could cost the government money if wealthy individuals left the UK or deferred selling assets.
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individuals → resist → assets
Instead Mr Healey announced a new capital gains tax relief, dubbed ‘Founder’s Relief’, in a bid to keep companies founded in the UK operating here.
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companies → announce → UK
He said the capital gains tax relief would be a 10 per cent rate on lifetime gains of up to £10million ‘for the founders of our most successful firms’.
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relief → say → firms
Mrs Badenoch said: ‘There are some things in this Budget I will welcome.
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I → say → Budget
Some of the Chancellor's colleagues, the deputy prime minister, the defence secretary, the energy secretary, they were calling on him to increase capital gains tax.
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they → call → tax
‘Can I thank him for ignoring them.
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I → thank → them
Tens of thousands of wealth creators have already fled Labour's Britain, and if he listened to his colleagues' bonkers ideas, many more would be heading for the departure lounge.’
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many → flee → lounge
The Aporia
