The Guardian view on Labour’s budget: bold ambitions and welcome first steps | Editorial
Banks, landlords and gambling firms will pay more as the chancellor begins building a fairer economy and a more active state in a cost of living crisis John Healey’s first budget was a Rorschach test. Supporters saw dozens of measures offering “ breathing space” to a public worn down by rising prices. Critics admitted to a slew of announcements but countered that each was modest in value .…
John Healey's first budget aimed to create a fairer economy and a more active state amid a cost of living crisis. Supporters praised the numerous "breathing space" measures, while critics argued the announcements were modest. The budget showed ambition in how the state can protect the public, but lacked the necessary firepower to make a significant impact.
The Office for Budget Responsibility's bleak outlook on living standards highlights the budget's temporary relief, as households will move from saving to borrowing in the coming years. The bank tax raises only £1.5bn over 15 months, far less than the projected £11bn from a Thatcher-style levy on interest-free deposits. The Resolution Foundation points out that most homes receive an energy payment, while poor families are left behind.
The budget's reliance on oil revenue before its approval is finalized and treating oil export as a climate solution are both reckless. The lack of clear answers on preventing inequality and funding the defence budget raises questions about the credibility of the claims made. Global events, such as a disruption in Hormuz, could further strain real incomes.
Although the budget sketches the outline of a social-democratic active state, it remains to be seen if these commitments can succeed with the available resources.
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