For all the sound and fury the press and opposition are trying to whip up over Philip Hammond’s first Budget, I think the general view in a few weeks or months time is that this was pretty much a non-event and at best, the warm up act for the second budget this Autumn.
With the Government enjoying an 18 point lead over Labour, buoyed by an extraordinary by-election win in Copeland and the main opposition party in serious trouble, is there a better time to bring forward much needed reforms of our tax system? If anything, Mr Hammond may rue the missed opportunity to bring forward more radical reforms.
The Chancellor is well aware the country’s finances are still in intensive care; national debt is fast approaching £1.7trn, after seven years of so called ‘austerity’ the government is still spending significantly more than it receives in taxes, the domestic economy is being propped up by personal savings being raided to sustain a mini spending spree and the national debt is only made manageable by historically low interest rates.
Mr Hammond was aware of the need to address the continuing pressure in our social care services and has used the income anticipated from the National Insurance reforms to apply a sticking plaster to the wound whilst more serious thinking is applied to a more radical set of reforms. The ticking bomb of the business rates review was defused with carefully targeted relief, but apart from those three measures there wasn’t much else of note.
The case for the National Insurance reforms can be justified with the changes to the State Pension uplift applying to self -employed people. How the back benchers react and vote will now be down to the whipping operation currently in full swing and the skill of the Treasury Team themselves to sell the merits of the reform.
My money is on the Chancellor’s view to prevail.
This article was written by Frank Browne a former leader of Wokingham Borough Council and a member of our non-executive board.