ALEX BRUMMER: Healey has shrunk in cowardice from the hard but necessary choices. We will all pay a price for his warped priorities

When I met John Healey for the first time almost two months ago, I noticed he had a strange and distracting verbal tic. He kept repeating that Britain's economy needed 'breathing space'. It's an oddly meaningless phrase, and one that the whole country is now likely all too familiar with after the Chancellor repeated it no fewer than ten times (I counted) in his soporific Budget speech. The slogan is even emblazoned on the front of the Government's 'Red Book', the document that contains all the fiscal small print and policy detail of the statement.

Breathing space or not, Healey's Budget was a dispiriting exercise in trivialities and parochialism, full of micro-details and fussy tinkering, with no fewer than 98 policy announcements revealed and allegedly 'costed'. Complacency That is ten more than Rachel Reeves mustered in her disastrous second (and final) Budget last November, which hiked taxes by tens of billions to add to the tens of billions she had gouged out of the country the previous year.

To say that Healey failed to rise to the times is the understatement of the decade. The idle complacency that has gripped the Labour benches is nothing short of a disgrace. Amid worsening, intractable geopolitical conflict, the unwinding of globalisation, surging energy prices and fears of one cataclysm or another driven by an out-of-control AI superintelligence, watching Healey's turgid speech, I was reminded of Jim Callaghan's notorious Budget of 1967, when the former naval officer reached for the seagoing metaphor 'steady as she goes'.

Alex Brummer says like two of his Labour predecessors, Denis Healey, the occupant of Number 11 has shrunk in cowardice from the hard but necessary choices Then, as now, it was the wrong approach. The Six-Day war between Israel and its Arab neighbours that June saw the Suez Canal closed, fuel supplies halted and a run on the pound – resulting in a 14 per cent devaluation and Callaghan expelled from the Treasury. Yes, Healey opened his statement yesterday with a promise to defend Ukraine.

But as he went on to cite such worthy subjects as 'Dolly Parton's Imagination Library' (a books-for-children charity) and the 'Trent Sports District', why did he not continue to focus on the existential issues facing the country? I hardly need to spell them out, but let me do so briefly. Saudi Arabia, one of the world's biggest suppliers of oil and capital, is all but locked down by Iran's demented Houthi rebels in Yemen . Kyiv is fighting a lonely and bitter war, pummelled daily by Putin's ballistic missiles.

Elon Musk is acting like a ketamine-fuelled Bond villain by periodically switching off his Starlink satellite network – on which civilian lives in Ukraine depend – with the reported contrivance of Donald Trump. Meanwhile, Microsoft founder Bill Gates is touring Western capitals warning that accelerating AI innovation could soon overwhelm Western defences against cyber-attack . On world markets, crude oil prices are up 62 per cent to $115-a-barrel since the outbreak of war in Iran in March, while the cost of natural gas is up by an astonishing 242 per cent.

Inflation is back with a vengeance – the Bank of England seems almost to have given up on its 2 per cent target , as the official British rate now surges to 3.5 per cent. What's Healey's response to all this? Paying £100 into the bank accounts of households living in cheaper properties, and tariff-free gherkins. It would be risible if it weren't so serious. Healey's boasts about Britain being the fastest-growing economy in the G7 run out of steam very quickly As the Government urges us to stockpile baked beans and sparks a run on bottled water and wind-up radios, Healey's Budget made no attempt to build our national resilience for a genuine fiscal crisis, from a market crash to another pandemic to war itself.

Indeed, instead of increasing the vital economic headroom necessary for ministers to deal with such events, he cut that space from £24billion to just £15billion, practically a rounding error for a Government that splurges £1.4trillion of our money annually. As the International Monetary Fund made clear at its Bangkok meeting just a fortnight ago, Britain has now reached the peak of the famous Laffer Curve. In other words, our leaders no longer have any capacity to raise major taxes, as to do so would destroy any remaining incentives to work and profit.

Given the many challenges our country faces , Healey had a golden opportunity in this crucial first budget to slash the bloated, inflation-proofed welfare bill, still rising by many billions annually and increasingly funded by borrowing. Had he done so, he would have earned the trust of the bond markets and trimmed the nation's crippling interest bill at a stroke. Warned Instead, in a distortion of values, he has blindly followed Andy Burnham's infamous dictum that social security is more important than national security.

Sooner or later, we shall all pay the price for this warped thinking. To fund his giveaways, the Chancellor acceded to Labour trade-union paymasters and hard-Left colleagues such as Angela Rayner by doubling the surcharge on the profits of British banks to 6 per cent. Voters don't love bankers, but as I recently warned in these pages, weakening these institutions' capacity to lend and raising the cost of mortgages and loans is utterly anti-growth, which Burnham assures us is his driving principle.

On that score, Healey's boasts about Britain being the fastest-growing economy in the G7 run out of steam very quickly. There may be some resilience this year, with output expected to rise by a paltry 1.2 per cent, but expansion will trail off to 1.1 per cent next year and supposedly 1.6 per cent in 2028. That is all, of course, according to the latest forecast from the Office for Budget Responsibility (OBR), whose prognostications scarcely enjoy a reputation for unrivalled accuracy.

As borrowing continues to soar, how precisely Burnham and Healey propose to find the cash to meet their promised 3 per cent of GDP to meet Nato defence targets by 2030 – and 3.5 per cent by 2035 – is one of the mysteries of the age. Cowardice And this in the very week that a motley cast of allegedly Iranian-funded actors are accused of seeking to infiltrate RAF bases to blow them up, and as our country remains all but defenceless against modern drone technology, cheap ballistic missiles and the destruction of the sub-sea cables that connect our island to the world beyond.

As for your own wealth, unless you live entirely on benefits, don't expect an uplift. Buried in the small print of the budget, I read that real household incomes – the spending power of citizens after inflation – is at best going to flatline over the next two years, even as Healey had the gall to hike the tax on savings interest yet again, which is of course a tax paid on the interest accrued to money you have already been taxed on. None of these oh-so typical Left-wing antics are remotely sustainable.

Like two of his Labour predecessors as Chancellor, James Callaghan and his namesake Denis Healey, the occupant of Number 11 has shrunk in cowardice from the hard but necessary choices. It all marks yet another step on what the great Austrian economist Friedrich Hayek saw as the path taken by every socialist government throughout history: the road to serfdom.