Budget thoughts

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Having now done what I expect to be my last pre-Budget radio comment, I can concentrate on preparing for tomorrow's immediate post-budget comment on Radio 2 at about 1.35 pm.

The difficulty with doing so is that so much is in the mix in this budget, and the steers being given by the Chancellor and Prime Minister are really quite varied as to their content.

On top of that, there is, inevitably, Andrew Bailey from the Bank of England muttering in the background. He gave a speech yesterday in which he said there was no room for any significant cuts in interest rates any time soon and that hard times are not over yet. I am sure that the timing was deliberate. This will be the framing of this budget. The message he is sending is that he has not got the recession he craves as yet and still wants it, whatever the cost. Good luck to the Chancellor with a friend like that in your camp.

So, what will Hunt do? First, he will work with small sums of money: Bailey gives him no choice but to do so, although Bailey is wrong, of course.

Second, I think Hunt's trailing of inheritance tax cuts was clever because I very much doubt that they are going to happen, at least this side of a general election. At best, he will announce a plan to cut the tax in stages from 2025 onwards, knowing that it is utterly meaningless when no Tory will go near the Treasury for a decade or more after the next election.

Third, there will be other cuts of that sort: income tax may well be cut for 2025/25, but not beforehand. The aim is to set elephant traps for Labour, who will then have to say what they will do with regard to those plans.

More pragmatically, there may be a national insurance cut, although it is so untargeted I fail to see why. There would have to be an increase in the rate over £50,000 to match the cut under £50,000 for it to be even remotely justifiable and fair. Justifying that to pensioners and those on benefits will also be hard - but maybe the Tories just do not care about that. They do not pay NI, of course.

And businesses will get a cut: I suspect the small business rate of corporation tax will fall in April next year, which has no impact in terms of tax paid until the Tories are out of office.

Maybe big business will keep 100% expending of investment costs as well - which is ludicrous when so much business capital expenditure is designed to undermine net-zero targets.

What else? Benefit adjustments will be mean.

There will be almost nothing for public spending.

And there will be lots of noise on supply-side reforms like planning and pension changes - plus Hunt's ISA plans, none of which will have the slightest impact on anything that happens in people's lives between now and whenever the Tories are swept from office.

It is being said that this will be a 'big fiscal event'. When you're playing with 1.5% of government spending at most, I don't see that.

I think we'll see political game-playing and a poorly judged use of public money. But I could be wrong, of course. Tomorrow, we'll know.

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