Why John Healey’s ‘business Budget’ will be a ruthless snub to Rachel Reeves

Become an Independent member to bookmark this article Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Membership today. Join today Already a member? Log in K eir Starmer’s hopes of being a successful prime minister effectively ended just three months after he won his election landslide . In fact, they ended the day he allowed his chancellor Rachel Reeves to introduce the second biggest tax raising budget in history. The most notorious of all the tax hikes were the increased levies she slapped on business . They included a big rise in employers’ national insurance contributions and a lowering of the threshold at which such payments had to be made. Followed by an increase in the minimum wag, additional workers rights and extra inheritance tax on family businesses, it created an enormous additional burden on companies, which damaged jobs, profits, investment, growth prospects and confidence. It also made a nonsense of earlier pledges by Starmer and Reeves that they would not fall into the trap of previous Labour administrations which allowed themselves to be caricatured as anti-business enemies of the profit motive. After that it was downhill all the way for Starmer and Reeves. Recommended The worst inflation rise in a year is a blow to the chancellor – and mortgages Taxing the rich won’t turn Britain around Burnham admits a generation has been failed. Now comes the hard part Since replacing them in No 10 and 11 in a bloodless Labour coup in July, Burnham and Healey have been careful not to trash their predecessors – in public, at least. But it seems that is about to change with next week’s Budget. Healey is a man of few words . In a parliamentary career stretching over three decades, he has the rare distinction of hardly ever saying anything colourful, or even interesting. Winston Churchill supposedly once said of mild mannered Labour prime minister Clement Attlee: “An empty taxi pulled up at Downing Street and Clement Attlee got out of it.” He could have been talking about Healey. Until now, the most exciting thing we have learned about Healey is that he always carries a bottle of HP sauce in his briefcase with him. But the chancellor has suddenly found a bold new voice and declared the Budget will be designed to bring relief to “bloody-minded entrepreneurs”. It is clearly designed to repair poor relations between Labour and the business community. And everyone – including Healey – knows who is chiefly responsible for that: Rachel Reeves . Healey, as the bosses’ new would-be best friend, went even further in an interview with The Times , stating: “I want to be a chancellor who backs business in Britain making a profit and entrepreneurs who are, in the end, the ones who challenge the status quo, come up with innovative ideas and are trying, some of them, through sheer bloody-mindedness to keep going through these sort of pressures.” There is a lot to unpack in that sentence. On paper, Healey has an even less pro-business CV than Reeves. Even though claims that she had exaggerated her “economist” credentials led to her being cruelly described by some as “Rachel from accounts”, she had at least worked in the banking sector. Healey, on the other hand, studied social science at university before a career as a journalist and trade union official. Not exactly the profile of the innovating, challenging and risk taking businessmen and women he is now trying to woo. The very fact that he, the chancellor of the Exchequer, felt the need to affirm his belief in the need to “make a profit” speaks volumes. But he is clearly going out of his way to send a clear message to business: I am on your side. As ever with modern politics, sound bites are one thing, delivering on promises is another. The business sector would be wise to defer any celebration until he has finished delivering his Budget speech next Wednesday. According to reports, he intends to cut red tape strangling business including a reduction in reporting requirements for smaller firms. It is all part of what a Treasury official is said to have described as clearing some of the “sludge-choking firms”. Struggling businesses will doubtless welcome any curb to the ever-expanding ream of regulations that tie them in knots and take up time that could otherwise be used to do what the new profit friendly Healey says he wants them to do. Recommended Messing with the mansion tax is bad news for the housing market Christian Broughton: The Independent speaks up for what matters – to us and to you Trump’s war on the press is a threat to American democracy But what they really want him to do is to reverse at least some of the damaging tax increases imposed on them by Reeves. If he does, it will be seen as a decisive move by Healey to bury the anti-business Labour legacy she left behind. And, if that happens, the too often undervalued and heroic, bloody-minded entrepreneurs of Britain will be minded to return the compliment.