The threshold for Jeremy Hunt’s first budget to be a success was set incredibly low when compared with his predecessor’s September ‘mini-budget’ that led to the eventual resignation of then Prime Minister, Liz Truss.
With his set piece fiscal event focusing heavily on childcare and pension changes, it was clear from the minute he opened his red box that the budget would be an attempt to get more people into the workforce and prevent people from perhaps prematurely becoming economically inactive.
Hunt’s performance seemed largely well-considered, balanced and overall stabilising, a noticeable departure from more recent budgets which naturally felt reactionary in the face of a pandemic.
However, fleet street took a characteristically varied view to the Chancellor’s first budget, with the Guardian leading on a “giveaway to the 1%” compared to the Express’ line that “we’ll make this work for Britain.” Most notably though, the Telegraph’s decision to not splash on the budget and lead with the crisis at Credit Suisse may be a cause for discussion among Tory Party officials.
What does this mean for the Conservative Party?
With an election in sight, it was interesting to see the Chancellor prioritise economic stability and inflation management over the opportunity to introduce tax cuts, instead opting for an increase in corporation tax and other revenue raising measures which are being described as a “stealth raid” on the public. Whether this will create enough discontent on the Tory benches and among the party faithful to provoke a noticeable backlash is still yet to be seen.
However, forecasts from the Office For Budget Responsibility (OBR) indicate that these measures will set the UK on course for its highest tax burden since the Second World War. The reaction from Conservative quarters such as the “Conservative Growth Group” who expressed “real concern” about measures introduced on Wednesday will indeed be food for thought for those not just in the Treasury but in No.10 too.
What does this mean for the Labour Party?
The Labour Party have invariably pushed back on one of Hunt’s flagship policies, saying they would reverse plans to scrap the cap on pension savings and appear to have formulated its latest attack line in claiming that this was a “tax cut for the top 1%.” Despite this, an area on which the Labour Party may have lost ground to the Conservative Party is on childcare.
Hunt’s flagship extension of free childcare rebuffs a long standing Labour Party complaint that the Tories were letting down working parents and notwithstanding concerns over timeframes and the logistics of implementing the policy, it could be very popular among voters.
What Next?
Questions remain on whether Hunt’s “tax raid” is too unpalatable for the Parliamentary Conservative Party and its key demographics. However, it is clear that the Chancellor’s plans are not built on a foundation of short-termism. The Conservative Party are well aware of the task at hand when it comes to winning the next general election, but this budget was aimed at long-term economic stability and driving those who are economically inactive back into the workforce.
While new attack lines for the Labour Party have emerged off the back of the budget, it is perhaps not as fruitful for Keir Starmer’s team as they may have hoped. Nonetheless, traditional battle lines were drawn in this budget with the Conservative Party attempting to brand itself as the party of fiscal responsibility, whilst the Labour Party tries to label it as the party of the elite. Should these communications strategies persist until the next General Election, it will be fought on the question of which party best address the cost of living crisis.