It seems as if we’ve been speculating about the contents of today’s Budget since the moment Rachel Reeves sat down after delivering her first one, just over a year ago.
Since then, unemployment has risen (every month) and growth rates have slumped quarter-to-quarter from 0.7 per cent to 0.3 per cent to 0.1 per cent. So, the stakes could not be higher.
On Monday night, a bullish Reeves told Labour MPs “I will not let them beat me” (she was talking about the media, and the Tories) adding “I’ll be there next year and I’ll be back the year after that.” How reassuring this mantra turns out to be will depend on whether her Budget pulls off the near impossible trick of confounding her critics, reassuring the markets and energising Labour MPs.
The best way to consider today’s statement (as is the case with pretty much all Budgets) is to think of the good, the bad and the ugly.
Let’s start with the good, for there will be some. Reports that stamp duty will be scrapped on new share listings for up to three years after IPO is certainly welcome. Scrapping the tax entirely is an idea that spooks the Treasury given it’s a reliable source of a few billion a year, but in recognising the benefits of suspending it for new listings they’re surely strengthening the case for one day doing away with it all together.
We may also hear some more encouraging lines on infrastructure investment and further planning reform. The rest of the good news will come from what’s been left out; no income tax hikes, no assault on the LLP structure, no exit taxes.
The bad news will be clear as day and it will take the form of around a dozen tax rises on everything from salary sacrifice to tourism to expensive properties.
And the ugly? Well, take your pick.
Fiscal drag, the most pernicious tax, looks set to endure beyond the end of this parliament (breaking a promise made by Reeves last year) while the OBR’s growth forecasts are likely to confirm our broadly miserable trajectory.
The Chancellor may surprise on the upside, but if the best we can say is that it wasn’t as bad as we feared, there won’t be much to celebrate.
For more considered analysis, join us for our Budget Day Live show from the heart of the Stock Exchange, 2pm today on CityAM.com and our social channels.