Composite: Guardian Design/Getty Images/AFP/REX/ShutterstockView image in fullscreen Composite: Guardian Design/Getty Images/AFP/REX/ShutterstockWill John Healey’s ‘breathing space’ budget deliver what Britain needs? Our panel respondsPolly Toynbee, Hettie O'Brien, Rohan Sathyamoorthy and John McDonnellAmid global economic storms, the new chancellor has promised to steer the course – with promises of more help to come. Will it be enough?‘Growth in every postcode’? Not yet, but hope at lastPolly ToynbeeGuardian columnistFirst, he did no harm. Then he scattered sprinkles of feel-goods. He told the truth about the state we’re in, deep in an extra £14bn of expensive debt, and, though he put it politely, at the mercy of the monster in the White House’s whims on Iran and tariffs.The losers were popular targets: the banks and gambling companies. But plainly bank threats to decamp partly paid off. Their shares leapt up on the news that their surcharge would rise to only 6%, not its original 8% before Tory reductions. They expected to pay more, and indeed they should. Gambling company shares jumped up too, with Rank up more than 10% on the day when the companies were only hit with five percentage points more tax on high-stakes machines, a missed chance, but better than nothing. The Treasury makes £4bn from gambling. Time to ban their advertising next.The chancellor gave a gracious nod to his predecessor. He should be grateful, as she took the pain and he takes the gain for her £66.6bn in tax rises, in NI for employers and frozen income tax thresholds that slide by unseen, but yield mightily until 2031.The public expected more personal taxes, according to Ipsos. It didn’t happen. Labour can take comfort that they think the Conservatives and Reform would both raise tax and cut public services. Instead, help comes for their energy costs, one of the greatest causes of household debt, with bills set to rise brutally in January. Homes in council tax bands A-D get £100 and the VAT reduction has risen to £50, while abolished standing charges leave 60% of homes better off. But the rumbling discontent that has upended our politics since Brexit is easily explained by the unprecedented long fall in median household income, only in the last year rising back to levels six years ago.Yet people’s priorities remain perverse: immigration stays top of their concerns, above inflation and the economy. Spending more on tougher border controls is second only to the NHS as the most popular expenditure. What do you do? Give in and let Shabana Mahmood be her harshest – or start telling people about the trade-off? Visas for work for another 200,000 migrants would bring the Treasury £18bn, says the Office for Budget Responsibility. Think what people could have for that.Is this the “growth in every post code and hope in every heart” Andy Burnham promises? No, not yet, not yet … Wait for his 10-year plan, spending review and an election with a new manifesto. And hope.Voters might have been hoping for something bolder than thisHettie O'BrienWriter on the Guardian’s morning newsletter First Edition, the Guardian Long Read, and the author of The Asset ClassWhile Keir Starmer promised to tread more “lightly” on voters’ lives, interpreting political disaffection as a sign that people wanted to hear less from their politicians, Andy Burnham has interpreted this loss of faith as a demand for more political action. But there was always a risk that without a theory of power, his premiership would come to resemble the Downing Street equivalent of the TV show Rip-Off Britain, giving voters “everyday fixes”, starter ISAs and cheaper gherkins while failing to change the economy or society as a whole. The charitable reading of John Healey’s budget is that it was better than it could have been (and better than the Treasury, which briefed this as a “low-key” event, wanted us to expect). His energy package, including a £100 cut to bills for houses in council tax brackets A-D, will help ease the cost of living and should lower inflation. He also proposed a series of changes that should help to bring down energy bills in future. But there was no help for low-income renters, nor any plans for funding public services that are facing real-terms cuts. Bankers, meanwhile, will be breathing a sigh of relief after Healey imposed a temporary additional 3% tax on bank profits, far below the pre-crisis level of 8%.For a government that has promised to turn back 40 years of neoliberalism, you might have been hoping for something much bolder than this. Small, short-term fixes and making it easier to cancel your Netflix subscription don’t equate to a political philosophy, let alone a programme capable of convincing voters that difficult trade-offs – whether on defence spending or the costs of an ageing society – will be worth it. Governing, as Mark McVitie wrote recently, requires political imagination and a sense of where you want to end up. Let’s hope that Andy Burnham’s has more to offer than this. Welcome news on apprenticeships, but otherwise little cheer for young people Rohan SathyamoorthyWriter from south-west LondonLook hard enough at this budget, and there are some signs that the chancellor is serious about bridging the age divide: an increase in tax for Britain’s banks, increased investment in apprenticeships and a new scheme for first-time buyers will be a welcome relief for many young and working people who are tired of bearing a disproportionate share of Britain’s economic burden. However, the limitations of even these mild reforms are already apparent: bank stocks rose conspicuously this morning on news that the rise would be temporary and only a mere three percentage points. And although the first-time buyer ISA will help young savers in the immediate term, in the long run it is only continuing to subsidise the housing crisis at the expense of the taxpayer, rather than intervening directly in the market to bring prices back down to an affordable level.Furthermore, while pensioners, businesses, workers, women, carers, families and even nightclubs all received explicit support from Healey, outrageously absent was any real help for young people, nor any mention of the student loan crisis. The only mention of young people not in employment, education or training was made in the context of reforming welfare. Instead of addressing the problems facing young people and making clear that he would tackle intergenerational fairness, Healey made his priority clear, with “the biggest increase in defence spending since the end of the cold war”.Ultimately, it will be impossible to fully judge this budget until we see the one that succeeds it. This “breathing space” budget will be beneficial only if it really is just that – buying time for the government to solve the painful, unignorable issues still crippling Britain’s young people: jobs, student loans, soaring rents. If the mixed rhetoric today is anything to go by, I won’t be holding my breath.The small-scale assistance on offer risks squandering public goodwillJohn McDonnellLabour MP for Hayes and Harlington. He was shadow chancellor for Labour from 2015 to 2020The chancellor has called his budget a “breathing space” budget and that’s exactly what it is. It’s less a break with Keir Starmer, but hopefully the start of a step away.The range of small-scale cost of living assistance offered on energy and food costs are all welcome elements of relief, but the harsh reality is that they provide an extremely limited breathing space.The government has to be extremely careful that the goodwill that Andy Burnham’s arrival has generated does not degenerate into disappointment and disillusionment. Reform UK may have dipped in the polls but the rise of the far right in Germany, France and Italy demonstrates all too clearly where that disappointment can lead to. This budget indicates to people that the government appreciates their concerns and is on their side, but it is absolutely critical that the time this budget may buy is used to demonstrate that it also has the plan needed to tackle the financial pressures people are under.Next year’s spending review provides that opportunity.The government has committed to the large-scale capital investment programme in council housing, home insulation and alternative energy that can stimulate the growth promised in every postcode.But there has to be demand in the economy too. That means putting money to spend in people’s pockets by modernising our taxation system to redistribute wealth and tackle the underinvestment in our public services, low pay and poverty that have held our economy back.Nobody doubts the pressure John Healey has been under as a result of the crass geopolitical nightmares caused by Donald Trump’s attacks on Iran. Both Benjamin Netanyahu and Vladimir Putin have played Trump like a fiddle to their own advantage, and we are all now paying the economic price. With the potential change in the midterms, perhaps it’s also time for leaders to start talking less about defence spending and more about peace making.Explore more on these topicsBudget 2026The panelTax and spendingJohn HealeyHousingMilitarycommentShareReuse this content
Comments (…)
Sign in or create your Guardian account to join the discussion