A breathing space Budget

When John Healey was appointed as Chancellor of the Exchequer, it was a surprise for those who had been briefing and speculating feverishly for weeks about two other candidates, Ed Miliband and Shabana Mahmood. The briefings were largely a proxy war for those who wanted to see very different approaches to the economy, with those supporting Miliband calling for more radicalism and those supporting Mahmood saying they wanted a more conservative approach.

When Burnham surprised both groups by choosing the man known as ‘a safe pair of hands’ it sent a different signal – one that was reinforced by all the pre-Budget briefing – that the Burnham project was going to take time to get under the hood and make the kind of changes to the economy that the PM spoke of before taking office.

Given that, and given the uncertain state of the world and the precarity of the nation’s finances, it had become clear that this Budget was not going to be the way the government would set out how it intends to make big change. It was a ‘breathing space’ Budget for citizens, for the markets and for the government itself. 

READ MORE: What was in John Healey’s Budget?

Polling undertaken for 38 Degrees by Survation and shared exclusively with LabourList showed that voters’ immediate response was broadly, if nervously, positive. Those polled liked the measures to help with energy bills but were still concerned that the cost of living will remain too high. 

The market too responded calmly to the Budget. And while, like many LabourList readers, I would prefer that a Labour government were less in hock to the bond markets, the levels of debt we inherited and the cost of servicing that debt, means that we cannot ignore the mood of our lenders. To be less reliant on the whims of the market, we have to find ways for them to have less power over our economy. That means reshaping the levels and form of government debt – something that cannot and should not be done in one Budget, or the reaction would lead to Liz Truss levels of madness.

There remain relatively high levels of goodwill for Burnham in the country and high levels of support for the PM within the Party (LabourList will be reporting soon on our exclusive polling of Party members’ response to the Budget to see if that has changed). It is my sense that this Budget has not done much to change that. There were no measures that would break the narrative of either Labour’s supporters or their opponents. That sense has been reinforced for me by listening to opposition politicians saying exactly what I expected them to say before Healey had stood up yesterday. No narratives were changed in the delivery of this Budget.

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This Budget has given the government breathing space. Now they must use it to start the journey to the kind of changes we all need to see.

Far bigger than the Budget will be the PM’s ten-year plan. There is no space in this promised document for small ideas. A ten year plan for a country that has felt so broken for so long must, by its nature, be ambitious. Yes, you can set out a step-by-step approach that will allow for realism rather than revolution. But the destination must be ambitious, achievable and something on which we can all measure progress as we approach it.

Breathing space is only ever something people need or want temporarily. When you take a ‘time out’ it is to give yourself a moment to catch your breath, ready to fight harder to win the real gains.

The six months after the Budget will be that moment. In it will come the ten-year plan, the Milburn review and the spending review. John Healey gave us all space to prepare the ground for these and ready ourselves for the fights to come. Now it is the job of every Labour MP, every Labour member to use it wisely. 

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