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It’s the day after the budget before and, with Jeremy Hunt’s offering now having been digested by Westminster, the battle lines are drawn.
The Labour Party’s key takeaway from the chancellor’s statement yesterday was his declaration that it is his “long-term ambition” to scrap National Insurance payments. Keir Starmer’s wonks have wasted no time in crunching the numbers. Their conclusion? Hunt’s “long-term” fiscal plan would cost £46 billion every year.
Sensing blood on Sky News this morning, shadow chancellor Rachel Reeves insisted that the government needs to explain where that amount of money will come from if it is “serious” about the pledge. “[It] is a bigger unfunded tax cut than even Liz Truss and Kwasi Kwarteng tried to get away with”, she blasted.
On cue, Rishi Sunak has this afternoon defended the government’s position on the future of NI. In a pub in South Yorkshire, the prime minister described NI as a “tax on work”, saying it is his “ultimate ambition” to remove that “unfairness” entirely. Then, in a statement of genuine significance, he suggested that scrapping NI could form part of the Conservative manifesto at the next election.
“If we stick to our plan, not just will we deliver the £900 of tax cuts this year, we can really make progress towards that long-term ambition over time in the next parliament”, the PM told punters.
One reading of the debate on NI is that the government is wandering into a trap of its own making. Certainly, by invoking the pledge in the budget yesterday, it has let Labour once more roll out its tried-and-tested Trussonomics attack lines. Labour loves to lampoon the ex-PM at every opportunity — note how Keir Starmer made much of her stateside pandering at prime minister’s questions last week, ridiculing Truss’ claim she was undermined by the “deep state”.
In this way, the debate surrounding the future of NI has allowed Starmer’s party to wriggle out of some uncomfortable post-budget questions.
The most politically potent part of Hunt’s budget statement was, undoubtedly, his raid on Labour’s non-doms policy. As a result, tricky questions now abound for Labour’s policy teams: do they rethink its spending pledges or find new revenue-raising measures? Ultimately, Hunt’s decision to steal Labour’s non-dom pledge, cynical though it is, is essentially guaranteed to tease out divisions in Starmer’s top rank. As a result, Reeves and co would much rather talk about Hunt’s alleged fiscal irresponsibility — and so they have.
The spectre of Liz Truss, as ever, looms large.
My featured article dives deeper on Hunt’s budget statement, concluding that its underwhelming nature no less than *rules out* a May election. Sunak will go long into the autumn/winter potentially with another fiscal statement under his belt.
Budget verdict: Jeremy Hunt’s offering will prove no election springboard
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Lunchtime soundbite
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‘Obviously you will understand I’ve been focused on the budget’ — At an event at a pub in South Yorkshire, Rishi Sunak is asked about his science secretary, Michelle Donelan. Donelan agreed a legal settlement worth £15,000 with an academic after questioning whether the person supported Hamas. The taxpayer picked up the bill. |
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