Andy Haldane: This will be ‘a Budget for the backbenchers, not business’
A former Bank of England chief economist has warned he expects to see “further borrowing” and “further tax rises” in next week’s Budget as he threw his weight behind Kemi Badenoch’s plan on the UK economy. Speaking at an Ipsos event, Andy Haldane said the Budget has been a “less lengthy and a less leaky [...]
Former Bank of England chief economist Andy Haldane has predicted that the upcoming Budget will see "further borrowing" and "further tax rises," expressing support for Kemi Badenoch's plan for the UK economy. Haldane noted that the Budget process has become less lengthy and more streamlined compared to past budgets, which he considers positive.
However, he cautioned that this Budget will primarily cater to the concerns of backbenchers rather than businesses or bond markets, as the Labour government is implementing "expensive" plans to expand the state. Haldane also criticized the widely-anticipated Labour plans to impose "windfall" taxes on British banks, stating that such measures could harm investor confidence in UK businesses.
His remarks come in the wake of an article he wrote, endorsing the Conservatives' plan to reduce business and employment taxes to stimulate economic growth. Haldane argued that the Conservatives' policies, including cuts to business and employment taxes and regulation to promote "animal spirits," are more suitable for boosting growth in the current fiscal environment.
He emphasized that these measures are preferable to the Labour government's expansive plans, which he sees as financially unsustainable. The tension between Haldane's comments and the Labour government's economic strategy is particularly notable as the Chancellor, John Healey, prepares to deliver the Budget. Badenoch urged Healey to cut spending across various sectors to fund increases in defense spending to 3% of GDP and to reduce taxes for businesses, citing her belief that a "nothing to see here" Budget could be more damaging to the UK economy than any tax statement from Healey's predecessor, Rachel Reeves, who increased taxes cumulatively by nearly £70 billion.
Badenoch emphasized that if Healey fails to find the money to reduce the deficit by 3%, he should explain his reasoning. The Conservatives have pledged to cut spending by over £70 billion to fund significant tax cuts, including reductions in stamp duty and inheritance tax.
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