Chancellor John Healey kicked off his first Budget by getting his excuses in first.
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Healey → kick → excuses
The wars in the Gulf and Ukraine, he began, were creating global storms which could quickly confound the official forecasts and knock the UK economy for six.
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which → begin → six
In other words, if it all goes pear-shaped, don't blame me.
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it → go → me
Economic growth was nudged up for this year from 1.1 per cent (its March forecast) to 1.2 per cent.
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growth → nudge → cent
Such tinkering is usually done by economic forecasters just to show they have a sense of humour after all.
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they → do → humour
But growth next year was downgraded from 1.6 per cent to a mere 1 per cent, indicating we really are in for some tough times this winter and beyond.
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we → downgrade → times
Yet, despite this near-stagnation, the OBR thought inflation would hit almost 4 per cent early in the new year – twice the official inflation target.
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inflation → think → target
These are not forecasts of an economic cornucopia to come.
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These → come → cornucopia
All the more reason, Healey averred, for 'fiscal discipline' to 'underwrite everything we do'.
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we → aver → everything
Yet the more he talked of his prudence, the more we noticed his profligacy.
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we → talk → profligacy
At the time of Rachel Reeves' first Budget in late 2024, it was forecast to be £89billion (up from £69billion on the OBR's last March 2024 forecast under the Tories).
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it → forecast → Tories
By March this year, the forecast had reached £116billion.
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forecast → reach → 116billion
Chancellor John Healey averred for 'fiscal discipline' to 'underwrite everything we do'.
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we → aver → everything
Yet the more he talked of his prudence, the more we noticed his profligacy, writes Andrew Neil
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Neil → talk → profligacy
But yesterday we learned it's now forecast to be £132billion — which is pretty much the same as last year.
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which → learn → year
After fewer than two-and-a-half years in power, Labour has added a cumulative £260billion in borrowing over five years to the deficit plans and forecasts it inherited in July 2024.
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it → add → July
Even that has not satiated Labour's appetite.
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that → satiate → appetite
Yesterday it added another £65billion to borrowing between now and the end of the decade.
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it → add → decade
It is the signal achievement of this Labour government that it has managed to combine an extra £325billion in borrowing with the highest tax burden in British history.
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it → manage → history
Growth is anaemic, unemployment (especially youth unemployment) has risen, job vacancies have collapsed, living standards are stagnant.
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standards → rise → ?
Nothing, it seems, can cure Labour of its addiction.
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it → seem → addiction
The main reason borrowing has turned out to be higher than expected this year is the rise in the cost of servicing the national debt – £14billion more because lenders are demanding higher interest rates from us.
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lenders → turn → us
It will be around £120billion this year, more than spending on defence and law-and-order combined.
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It → combine → defence
You'd think that might give Labour cause to pause.
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that → think → cause
We will likely be spending more only on health and welfare.
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We → spend → health
Labour believes in deficit reduction on the never-never – in the sense that it never happens.
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it → believe → sense
It increases borrowing in the current year and the next two.
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It → increase → year
Then it squeezes spending in the years after that to be able to claim it's embarked on a strategy of deficit reduction.
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it → squeeze → reduction
Except that the squeeze in the outer years never happens.
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squeeze → happen → years
That's what Reeves did in her two Budgets — and it's what Healey did yet again yesterday.
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Healey → do → what
But nobody expects Labour to go for the drastic spending cuts towards the end of the decade that its forecasts imply.
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forecasts → expect → that
Current Labour plans indicate cuts of 2.3 per cent in real terms in many areas of public spending between 2028-29 and 2031-32.
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plans → indicate → 2028
If you believe that, I have several bridges to sell you.
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I → believe → you
Healey – seen delivering the Budget to the Commons – also introduced a raft of tax changes, only one of which (doubling the bank surcharge) will raise any decent amount of money
After all, this is a government which is spending around £1.4trillion this year, a sum from which yesterday it didn't cut a penny – not a sous, not a cent, not a groat.
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it → see → penny
So if you expect deep real-terms cuts in spending come 2029-30, then you must also believe there are fairies at the bottom of your garden.
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you → expect → garden
Yesterday's Budget kicked every difficult spending decision into the long grass.
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Budget → kick → grass
That will have to wait until next year's spending review, likely not before the autumn.
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That → have → autumn
No doubt president Putin will hold off doing anything nasty till we get our defence ducks in a row.
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we → hold → row
That will have to wait for various reports.
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That → have → reports
Meanwhile the total welfare budget soars, almost out of control.
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budget → soar → control
…and 14 more, not listed.
The Aporia
