'Good vibes' Burnham lacks courage to cut benefits

What a wet dishrag! A wasted opportunity! A disappointment. John Healey’s speech won’t go down alongside the great radical and brave Budgets of past chancellors like Roy Jenkins, Nigel Lawson and Gordon Brown. OK, it doesn’t help that Healey lacks panache and authority at the despatch box, but his Budget failed by more important measures too. It lacked big ideas and memorable phrases, and it lacked courage . Last summer, when Andy Burnham mounted his successful coup against Sir Keir Starmer, promising radical change, he was accused of riding into Downing Street on a wave of good vibes but bereft of solid policies.

Burnham came to power avoiding proper scrutiny – remember that speech in Manchester where he took no questions? But people gave Burnham the benefit of the doubt. He’d been out of government for 10 years and couldn’t be expected to be on top of everything. All would become clear, we were told, when Healey delivered his Budget in late October. We were warned the Budget might be lacklustre , but some of us assumed the Treasury was playing down expectations so the Chancellor could surprise us all with some radical measures which hadn’t been leaked – the rabbits from a hat for which Brown was so famous as Chancellor.

But Healey’s effort yesterday really was as dull as we’d been led to expect. At times it sounded like a shopping list of small goodies – the odd £3m here, £5m there, and several bungs of £10m. Tiny sums in government terms. Healey and Burnham are finding that warm words, vibes, vague ideas and unrealistic promises are the easy bit. Governing – hard decisions and selling them – is a lot tougher, especially amid tight finances and serious war in the Middle East.

On defence, for example, this Budget was the obvious moment for the Chancellor to explain how he’ll now reach the Nato targets for each country to spend three per cent of GDP by 2030, and 3.5 per cent by 2035. That was the very issue over which Healey resigned as defence secretary in June, just 140 days ago, complaining that the very Treasury he now runs wouldn’t commit the resources. It was one of the great political resignations of modern times, and contributed to Starmer’s downfall 11 days later.

Yet after this Budget, we aren’t much wiser as to how the Treasury will reach Nato’s goals. Wait, we’re told, for the Government’s Spending Review next year. Healey even said that “today I am getting work underway to get there [the Nato targets] in a fiscally responsible way.” Getting “work underway” today? Today? Surely he should have initiated such work as his first priority as soon as Burnham appointed him as Chancellor in July? Was Healey so overcome by personal ambition that he forgot, or was he nobbled by dastardly Treasury officials?

This was billed as a “ Breathing Space ” Budget, but on defence we don’t need more space or dithering. The armed forces and our Nato allies can’t wait until the Spending Review, whenever that is next year. Nor can our defence industries. They need clarity and commitment and certainty. Healey and his Treasury need to get ahead of this issue. In his resignation letter in June, Healey actually quoted Starmer – then still Prime Minister – as saying: “It is our intelligence assessment, and the assessment of other countries in Nato, that there could be an attack by Russia on Nato as soon as 2030.”

If that horrendous moment were to arise, we’d immediately have to spend a lot more than the 3 per cent or 3.5 per cent Nato targets. Healey and his Treasury boffins should be preparing right now for the possibility that defence budgets might have to rise to four per cent of GDP, and maybe a lot, lot more. Indeed, Poland and three Baltic states already contribute around 5 per cent of their GDP to defence, and 10 other Nato members also spend more than the UK, which is below the Nato average.

That would be the kind of bold and brave planning and decision-making that Burnham, the ambitious candidate, led us to believe would be a feature of his government. A poll by More in Common this week suggests that 57 per cent of voters would pay for higher spending on defence with cuts in welfare (with 43 per cent opposed). Labour ministers are in danger of being out of touch with public opinion. And voters will surely get more hawkish if Vladimir Putin makes significant gains in Ukraine, or if Russia gets more aggressive through cyber attacks.

Healey also ducked the welfare issue, where almost everyone agrees budgets cannot be sustained in the long term. Healey should have had the courage to announce there would be serious reductions in the number of people who could claim personal independence payments and disability benefits, and over time significant cuts in some benefit cash sums. Burnham is master of his party now, in a way Starmer never was as Prime Minister, and wouldn’t face the scale of backbench rebellion which his predecessor suffered over his £5bn welfare cuts package.

Burnham told Laura Kuenssberg of the BBC in July that “we’ve got to get really serious as a country at bringing the welfare bill down”. The problem is that Burnham seems to shy away from real cuts, arguing instead that getting young people into jobs would also cut the welfare bill. To a small degree, perhaps, but not on a significant scale. Astute politicians announce difficult decisions early, while ahead in the polls (as Labour now is), and long before an election.

Perhaps the lacklustre Budget was designed not to offend voters, and to dole out a few bribes – like the £100 energy handouts. All, perhaps, to prepare for a snap election. A senior Liberal Democrat strategist said this week there’s a 30 per cent chance of an election before Christmas. I can’t see it myself, and Burnham has denied he’ll go to the country any time soon. And there was little in what Healey said to excite Labour supporters or party activists.

In no poll since Burnham took over has Labour achieved the 34 per cent they got in the 2024 landslide. And Burnham should also remember Theresa May. In 2017 she called an election while a whopping 21 per cent ahead of Labour and ended up losing her Commons majority. The Chancellor did nothing to assure Labour of a quick poll victory. Quite the opposite.