MP for Wimbledon: Labour’s ‘benign budget’ won’t fix the country’s problems

I wanted to provide my initial thoughts on today’s Budget and the effect the Government’s decisions will have on individuals, families & businesses across the Wimbledon constituency. Overall, it was a pretty uneventful Budget - with all the difficult choices postponed to next year’s spending review. As the financial expert, Martin Lewis, has also said today ‘the Spending Review is going to be a big one next time. That’s where the push for cuts will come I suspect.’

Many in my party think this relatively benign budget means the country is being softened up for an early election whilst Labour are still ahead in the polls, either now or next May. The alternative analysis might simply be, however, that this is simply a timid budget from a Labour government constitutionally incapable of making the tough calls. Despite his affable manner and excellent communication skills, I remain concerned Andy Burnham’s overarching desire to be liked will prevent him taking the difficult decisions. On this reading the Chancellor has simply done the bidding of a PM who, despite his political star riding high, has ducked his best chance of starting to address the UK’s fundamental problems.

I should begin by welcoming some of the positive steps taken in the budget. My Liberal Democrat colleagues and I have long campaigned for more support for our struggling high streets, and in particular pubs, bars, restaurants & hair salons. I was consequently pleased to see real movement on abolishing business rates. However this is not the VAT cut for which many in these sectors, and my party, have long campaigned, and will not benefit the many businesses in Wimbledon whose rateable value is above the £18,000 cut-off. The ongoing commitment to Ukraine and continued focus on tackling homelessness & rough sleeping are also both welcome; as was the end of the Lifetime ISA penalty for those buying a house or flat over £450,000.

But much more needed to be done to grow the economy as the financial position facing the country remains very poor. Paul Johnson, the former director of IFS, today described the OBR growth predictions as ‘still feeble. Sadly’ and ‘John Healy got his can and gave it an almighty kick down the road’. There has been a downgrade in our GDP growth forecast over the next 5 years and the UK is also set to borrow more each year than previously planned. There was also little mention in the Chancellor’s speech of London’s role as the UK’s economic powerhouse. Sadly this Labour government is continuing the previous Conservative government’s folly of an ever increasing tax burden, escalating welfare spending, low levels of house building and meagre growth. This is simply not sustainable. 

I was also concerned to hear of the additional burdens applied to the self-employed through changes to self assessment payments (one of the single biggest tax measures announced), the silence from the government on schools, colleges & student loan reform, increased taxes on savings, further taxes on the residential housing market (which force more landlords to abandon the sector and increase rents). On top of all this income tax thresholds are still frozen, which is a direct tax rise on normal working people, adding a colossal 7% in real terms to the tax burden someone on £30,000 per year is earning..  

Unfortunately, the government has not risen to the economic challenge. When Keir Starmer took office it soon became clear his only plan was to have a plan. I now fear Andy Burnham is making the same mistake with the budget making no substantive progress on addressing welfare spending, social care and defence readiness.  

Most importantly the chancellor failed to address our meagre growth prospects in any meaningful way. That requires the Government to fix the Conservatives' botched Brexit deal by joining the single market and a customs union and use the billions that it raises to cut taxes and invest in defence and public services. 

My Liberal Democrat colleagues and I will continue to hold this government to account for its economic decisions. I look forward to delving into the details of the Budget in the next few days and have put my name down to speak in the debate.