Make or break Budget could be the starting gun for next General Election
Today’s Budget comes on the 101st day of Andy Burnham’s fledgling premiership. But what his Chancellor, John Healey, says at the despatch box at around 12.30pm this afternoon could make or break the rest of the Prime Minister’s time inside No. 10. With soaring inflation and an escalating cost of living squeeze, Britain’s hard-pressed families are desperate for genuine relief. Household energy bills continue to climb, with Ofgem price cap increases threatening to swallow up modest relief measures like the electricity VAT cut.
It is time to put money back into voters’ pockets. All the indications are that this is unlikely to happen. As Tory leader Kemi Badenoch has warned, there’s a “red light flashing” on the dashboard, and it can only mean one thing - tax rises. Burnham and Healey are trapped between a rock and a very hard place. To quote a former Labour Treasury man, Liam Byrne, “there is no money”. The nation’s wallet is threadbare, and the economy is spluttering along at best.
Funds are desperately needed to boost our defences to protect the UK from increased global threats, notably Vladimir Putin and Iran, while investment in our ailing social care system is critical. Jobs are becoming scarcer by the day, the education system is in tatters, and businesses and High Streets across the country are dying. One simple solution would be to slash the UK’s bloated welfare budget, with spending on benefits totally out of control.
But Burnham and Healey won’t do this as a point of principle as the Labour Party continues to lurch to the Left. Instead, they are likely to pull the default tax hike lever to bail them out of a tight spot. We’re unlikely to get hikes on the scale of Rachel Reeves’ two mega-tax bombs in 2024 and 2025. But it will be painful, nonetheless, with the cost of living crisis continuing to bite hard. It could even get worse this winter with energy prices set to jump again and no end in sight to the Middle East crisis.
Healey faces significant financial headwinds – government debt has exceeded £3 trillion, and the Treasury spent £10.9 billion servicing the interest in September alone. Meanwhile, the Institute for Fiscal Studies has said the Chancellor faces a £35 billion shortfall to maintain existing spending policies and to boost defence funding. Given Labour’s obsession with penalising wealth, middle and high earners are likely to bear the brunt of any new measures.
So, what does this mean going forward - especially as rumours continue to swirl about a snap general election? Labour’s poll ratings have bounced since Burnham became Prime Minister in the summer. The Party is polling at around 28%, six or seven points ahead of Reform UK and the Conservatives. This has triggered expectations that the PM is about to pull the trigger and call a national vote, either later this year or next spring. The latter is more likely, but budgets can negatively impact Governments, especially if taxes go up.
Left out here: Leaves out what changes the picture
Burnham had already ruled out an early general election, including on ITV's Good Morning Britain on the Monday before the Budget. The article says the PM is expected to call an election and that spring is more likely, so a reader believes a snap election is on the cards when the Prime Minister had publicly ruled it out.
How we know
- GB News reported“softening us all up for an early general election”Andy Burnham rules out calling general election in next 12 months as Prime Minister says he is not thinking about Labour's 'prospects' (opens in a new tab)
- GB News reported“Andy Burnham has ruled out calling a snap general election in the next 12 months”Andy Burnham rules out calling general election in next 12 months as Prime Minister says he is not thinking about Labour's 'prospects' (opens in a new tab)
Combined with Burnham’s threats to ditch the pensions Triple Lock and march Britain back into the EU, then the polls may look very different come March and April, the very moment he could trigger an election. This is also when some of these budgetary measures take hold, when the new financial year kicks in. For these reasons alone, the sixty-or-so minutes the Chancellor spends on his feet in the House of Commons may well determine the future of how this country is governed.
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