Kemi Badenoch scored a direct hit on Keir Starmer at Prime Minister’s Questions yesterday. In asking him if he could rule out raising income tax, VAT or national insurance she stitched him up like a kipper.
She knew (we all knew) that he would decline the opportunity and the Tory leader knew that when she last asked him the exact same question in the summer he had replied, “yes.” We didn’t need Badenoch to follow up with “so what’s changed?” – we (well, those of us who break away from our day to watch parliamentary exchanges) were shouting it at our screens.
The opposition leader generously offered the PM some ideas to get out of the fiscal mess we’re in, though Starmer looked as if he’d rather be the guest speaker at the annual meeting of former non-doms than hear her out. Instead he boasted of strong retail sales (he may as well have just said “It was sunny in the summer!”) and he championed the sale of fighter jets to Turkey, even though the deal was largely thrashed out under the Tories.
“We’ll take no advice from the opposition,” Starmer boomed. So, whose advice could he listen to?
Helpfully, there’s plenty around and everyone knows the best kind comes from newspaper columnists. The Guardian drafted the speech they think Reeves should give on Budget day, in which their dream-Chancellor unveils a financial transaction tax, hikes the bank levy, commits 1 per cent of GDP to “green” spending and guarantees everyone a job.
A more sober proposition comes from the FT’s Martin Wolf, who says Reeves should go for “growth at all costs” – by scrapping new workers’ rights and lowering electricity costs. Alas, he also supports – albeit reluctantly – the idea of increasing income tax and VAT. He loses marks for that.
Regular readers will know our own prescription; major reductions in public expenditure (starting with welfare) to be taken with pro-enterprise tax cuts and a roadmap to a lower overall tax burden. That would entail sticking to the plan – announced this time last time to much fanfare – to unfreeze income tax thresholds by the end of this parliament. It tells you how grim things are that this mooted future righting of a pernicious wrong was greeted with so much enthusiasm.
Unfortunately, there’s a frighteningly good chance that not only will the freeze be extended but the rates themselves will go up. In fact, the best thing you can say about the Budget is that it isn’t taking place on Halloween.