Two pennies from heaven

Government budgets used to be serious affairs, so much so that when  a previous Chancellor of the Exchequer back in the Fifties hinted what might be in his budget before telling parliament  he had to resign (subs to fill in the details). Now the biggest thing in Jeremy Hunt’s budget was all but officially announced well before the event. Namely, a two pence cut in National Insurance contributions—something that doesn’t help the poorest who are below the NI threshold, nor pensioners who don’t pay NI full stop. Middle income earners may benefit a little, although the freeze on uprating income tax thresholds will see more of their income clawed back. Big deal all round. Many commentators have looked at this budget through a lens focused on this year's general election, but it’s really about general election 2028 or 2029—the thinking being that by tying Labour’s hands to an unaffordable tax cut now, Labour (as usual) will have to risk a lot of unpopularity seeking to repair the damage done by the Tories. This then should pave the way for their return in the subsequent general election. Since the current Labour leadership faction is thoroughly wedded to economic orthodoxy, there seems little chance that they will escape a drubbing in four or five years’ time, and any modest gains in that period will be washed away just as they usually are. But as somebody once said, hope springs eternal.