No omnishambles to see here: Healey’s ‘breathing space’ budget plays it safe

Many of the memorable budgets are remembered for reasons their authors would rather forget. George Osborne still winces about his “omnishambles” budget in 2012, which triggered widespread public outcry about everything from taxes on pasties to imposts on static caravans. Ridicule in the media was followed by almost-immediate U-turns. The “Barber boom” budget of 1972 massively overheated the economy, sending prices soaring by 20% in a single year before leading to a savage recession.

Tory credibility has yet to fully recover from the mega-disaster of the “mini-budget” perpetrated by Liz Truss of 49 days and “Kamikwasi” Kwarteng in 2022. Last year’s “leaky bucket” budget, when all the main measures had been made public before the chancellor got to her feet, was painful for Rachel Reeves. So John Healey’s central priority in his debut budget as chancellor was to avoid joining that dolorous gallery. Aides say his primary objective was to nurture economic recovery and avoid causing a panic in the borrowing markets.

He was guided by a version of the Latin maxim historically sworn by physicians: “First, do no harm.” In that limited ambition, initial impressions suggest that he has succeeded. Labour MPs broadly liked what they heard. There was nothing especially aggravating for the median voter. The markets have responded calmly. There were three clear strands to this budget. One was measures to help with the cost of living. This has been an animating theme of Andy Burnham since he moved into No 10 just over 100 days ago.

The Tesco slogan “Every Little Helps” has been the informal motto of his government. The budget giveaways were focused on helping first-time home buyers, extending the freeze on fuel duties, and offering relief from higher energy bills for less affluent households. About 20m of them will receive a £100 payment. Standing charges on gas and electricity bills are to be scrapped. The budget also removed import tariffs on products such as baked beans, chocolate and jarred pickles.

If the chancellor is unlucky, this may go down as “the gherkin” budget. Talk to ministers privately and they will accept that modest measures to ease the pressure on voters are relatively small beer compared with the impact on households of rising inflation and borrowing costs fuelled by Donald Trump’s war with Iran. Despite what Mr Healey called “global economic storms”, cabinet members nevertheless hope to get some credit when the government does what it can to give people a bit more “breathing space” – a phrase the chancellor likes so much that he used it more than half a dozen times.

Higher taxes on gambling and a temporary increase in the levy on bank profits will help pay the bill for these measures. The rise in the price of bank shares suggests that this hasn’t been as bad for them as they once claimed to fear. A second strand of the budget was also in keeping with the overall thrust of Burnhamism. The chancellor claimed he would preside over “the most radical act of devolution in a generation”. Mayors will get to retain all of the revenue from business rates by the end of the decade.

It is planned that they will receive a proportion of income tax receipts to spend in their localities from 2028, when they will also receive powers to introduce a tourist tax. A third strand was defence spending. For his own reputation’s sake, Mr Healey could not have avoided this subject. Not when he noisily resigned as defence secretary in June complaining that the Treasury wasn’t adequately resourcing the security of the nation and the then prime minister, Sir Keir Starmer, was unwilling or unable to make Ms Reeves cough up the cash.

The chancellor said he’d found the money to fully fund the Defence Investment Plan. Some of the £20.4bn of additional capital allocated to the National Wealth Fund and the British Business Bank will be channelled into the defence industry. He described this as “getting work underway” to reach the targets to be spending 3% of GDP on defence by 2030 and 3.5% by 2035. Opposition MPs mocked him for not setting out how he was going to fund hitting those targets, one of several critical issues that he kicked into the future.

“Mañana” budget was a favoured trope among the Tories. The main criticism of this budget is that it has flinched from grasping the spikier nettles that confront the chancellor and his colleagues. The government has a hope that it can bring down the welfare bill, but not yet a plan. Alan Milburn will soon publish his recommendations on how to help jobless young people into work. He’s expected to suggest a mix of some cuts to cash benefits along with substantial additional spending on helping people into employment.

We have yet to see whether Labour backbenchers, who destroyed Sir Keir’s authority by rebelling over welfare cuts, will accept this combination of carrot and stick. Related articles: Maria Corina Machado’s rapturous return to Venezuela loosens US grip on oil fields Healey’s warm-up budget will leave radical reformers cold As the budget statement went on, it became clear that we won’t see the real colour of this chancellor’s character until next year’s crunchy spending review.

This will decide departmental budgets from 2028 to 2031. No one finds the totals currently pencilled in for those years at all plausible. The Institute for Fiscal Studies reckons the chancellor will need to find an extra £35bn a year from somewhere if he wants to sustain the growth in spending on the NHS, achieve the government’s targets for defence and avoid cuts in other areas, many of them very politically sensitive. It is the spending review that will be a truer test of John Healey’s mettle than this steady-as-she-goes budget.

He’s bought himself a bit of breathing space, but not for all that long. Three more takeaways from the budget • The chancellor abandoned plans to reduce the amount people can save in a cash Isa. The limit will remain unchanged at £20,000 a year. • In a bid to help smaller high street businesses, a further 70,000 retail, hospitality and leisure firms will be exempt from business rates. • Taxes on income from property and savings are to be increased by two percentage points.

Before you go The Celebrity Traitors approaches its denouement. My family has been enjoying it. If you have too, you may want to test your powers of deduction and ability to fool your friends at home. The TV show has spawned some spin-off games, but for me you can’t better an older one called Werewolf. In a remote, sleepy hamlet, the faithful are represented by the Villagers. One of them will be murdered each night by the Werewolves who silently pick a victim while everyone else has their eyes closed.

After each murder, there is a banishment vote. The game includes additional characters with special powers – such as The Priest, The Orphan and The Magician – which makes the bluffing and deceiving even more lively. You’ll need someone to play the host. It is entirely optional whether or not they try to dress with the panache of Claudia Winkleman. The game is best played with at least six players and can accommodate many more. Since one of my daughters bought it for me a few years ago, Werewolf has become a fun fixture of Christmas in the Rawnsley household.

Photograph by Dan Kitwood/Getty Images Politics Budget John Healey