Faint praise

‘Thousands of activists will be heading out onto the doorstep with a spring in their step for this weekend's Budget National Campaign Weekend’ says the LabourList website. I sincerely hope that much of the negative reaction to Labour’s first budget in 14 years doesn’t dampen their spirits, since who could deny for example that the increases in the National ‘Living’ Wage aren’t welcome? Why shouldn’t people on the lowest wages not get an increase to keep up with inflation, since that’s all it is? And since I have argued for more borrowing, I won’t criticise that, even if some of the extra money may be spent on useless things—like carbon capture and storage. Some of it will also no doubt be spent on new nuclear power plant (even though the first delay to the miraculous ‘modular nuclear power stations’ was in the news last week). On the down side bus fares are going up by 50% but fuel duty is frozen yet again. What signal does that send? Whilst the markets might have a concern about the extra borrowing, the biggest issue in this budget is the tax on jobs—an increase in employers’ national insurance contributions. Most pundits agree that this will lead to lower wage settlements. As regards the government’s much touted emphasis on growth what is now projected over the next five years is so insipid it’s barely worth talking up, and even then it depends on everything working out. I do approve of the increase in capital gains tax, but it is still less than income tax. There’s no real attempt to increase the burden on those with the ‘broadest shoulders,’ now one of Starmer’s many broken promises. There’s no mention of tackling tax havens or perhaps working internationally on taking forward the Tobin tax on financial transactions. This budget has some merit but it will do nothing to close the wealth inequality gap, and on a Rotten Tomatoes scale I would say it might score 3.5. Unless it really turns the economy around in a way that most people notice in four or five years' time, it will already have furthered the gloom enveloping the UK economy and won’t have enhanced Labour’s prospects of a second term in government.