How the budget can meet the moment

A chieving the target of the UK being the fastest-growing economy in the G7 was something most people thought we could never do, but we have. Quarter after quarter of unexpectedly good news on economic growth is, in part, thanks to the policies pursued by the Labour government since 2024. Most commented 1 Where’s Marie Curie? GCSE science ‘fails to credit women’ Science 225 comments 2 US withdraws diplomats from Saudi Arabia amid deadly Houthi attacks US news 195 comments 3 Alan Thornett obituary: union leader nicknamed ‘the Mole’ Obituaries 89 comments 4 Times letters: Failure to protect the elderly in care homes Letters to the Editor 58 comments 5 MI5 spied on NHS founder Nye Bevan for decades History 86 comments But some sectors, such as construction and retail, are having a harder time than others and, crucially, above-target inflation is driving the public’s pessimism about the future. Top stories 1 Tripsnacking? Finally a travel trend I can get on board with Advice These dynamics, alongside the cost of government borrowing and the need to reprioritise public spending, set the exam question for the chancellor’s budget next week . For the consumer, energy and water bills, council tax, the price of the weekly shop and rent or mortgage payments are the most important proof points when deciding if the economy is heading in the right direction. That’s why MPs will be expecting to see support for energy bills . Advertisement The government should learn from the winter fuel debacle and ensure the threshold at which people get support is optimal, noting the benefit of mechanically keeping inflation lower than it might be by keeping bills down. Threshold questions are always difficult: who deserves what level of support, and who doesn’t? Budget 2026 predictions: what tax changes can we expect? Given the challenging winter ahead, with hikes to energy bills and El Niño causing more extreme weather, and higher-than-hoped-for inflation expected next year, MPs will be asking on behalf of their constituents: does this budget meet the moment? If it doesn’t, 2027 could be a challenging year not just for the economy, but for the public’s support of the government. Top stories 1 High street banks are on borrowed time Saving & Investing 2 Belgium’s most stylish autumn weekend break — and it’s not Bruges Belgium For businesses, ministers must create the conditions for them to grow, export and employ more people. Business leaders will be looking for policy decisions and not just rhetoric. This is vital given the government’s intention to wait until the end of 2027 to conduct the next spending review, and with it the big questions that need to be answered. This budget, for example, must be the last budget in which the question of how we reach spending of 3.5 per cent of GDP on defence is left unanswered. Advertisement Additional support for high street businesses will be welcomed. Expected changes to taxes being paid by the banks , which will be popular in the Commons but not in the City, should be offset by whatever the chancellor can do to support the underlying dynamism of the private sector more widely. Andy Burnham’s approval rating: the latest polls For example, the sectors of the UK economy investing most in artificial intelligence continue to play an outsized role in driving economic growth. The chancellor should therefore support these sectors to go even further and help other sectors to integrate technology to stimulate productivity-led growth. Workers should be given wider access to AI training. This technology-led approach in the private sector should be applied to public services too, making them better and cheaper for the taxpayer. A new approach to digital transformation is needed. This must apply to frontline services and not just back office functions in Whitehall. Efficiency savings in the latter are often drowned out by overspending in the former. Advertisement The cabinet secretary should therefore be personally held to account, both within government and by parliament, for the civil service hitting its efficiency targets, and for the rapid adoption of technology that will result in reductions in the cost of the state and the services it provides to the public. To enable this, I would recommend centralising digital transformation budgets with decisions on priority spending taken at the centre of government, to make sure departments get on with the work. The Labour Party wins or loses elections based on whether the public can trust it on the economy. We secured a landslide majority in 2024, in part, because we secured that trust. I know the new prime minister and chancellor will go out of their way to make sure we don’t lose it before the next. Darren Jones was chief secretary to the Treasury, 2024-25, and chief secretary to Sir Keir Starmer, 2025-26