Given the tone and content of much of the coverage in the British press, you would be forgiven for thinking that the Labour government’s first budget in 14 years was a bust, and that is putting it nicely. Yet this is more than unfair. It obfuscates four important aspects of the budget, sidelines three lessons for the future and undermines today’s good news from the Bank of England.
In the run-up to the budget on 30 October, I was among those warning that the announcements from the chancellor, Rachel Reeves, would “please almost no one” and that they should not be assessed “according to their ability to meet all the demands that have been placed on them”.
This view was based on the reality of a British economy characterised by many years of low growth and sagging productivity, deepening structural problems, high debt and heavy deficits, crumbling public services and inadequate public investment. It is an awful combination that produces that unreconcilable mix of massive demands on budgetary resources and neither the headroom nor the operational flexibility to come anywhere near meeting them.
In such a situation, it should come as no surprise that, depending on which news media you read and listen to, there are loud complaints that the budget will destroy jobs, lower wages, increase mortgage payments, steal hard-earned inheritances, boost inflation and destabilise financial markets.
The protests do not stop there. Some have claimed that the budget is ripping apart the fabric of the economy and killing business and farming. Others view it as harming elderly people to benefit the young, who should be encouraged to work harder rather than being pampered.
Now don’t get me wrong. The budget is far from perfect. Indeed, I would have liked to see a few things done differently. Having said that, the long........