The Chancellor appears determined to steal Labour’s clothes with this Red Tory Budget
THE internal debate over whether the Conservatives are better off fighting elections from the Right or the centre ground has long divided the party almost as much as the European question.
With Brexit now done and dusted, a tug-of-war continues to be waged between so-called Red Tories and their more Thatcherite colleagues.
Yesterday’s make-or-break Budget confirmed beyond a reasonable doubt on which side of the ideological fence Rishi Sunak and his Chancellor reside.
In unveiling an unashamedly centrist set of proposals designed to out-labour the opposition, Jeremy Hunt presented the electorate with a Gordon Brown Budget rather than a Nigel Lawson one.
Brazenly political, it smacked of pre-electioneering in its obvious attempts to shoot some of Sir Keir Starmer’s foxes.
First came the announcement of £1million towards a new war memorial for Muslim soldiers who served in world wars, cannily timed as Labour is haemorrhaging votes to the likes of George Galloway over its refusal to unequivocally call for an immediate ceasefire in Gaza.
Next, we heard that the repayment period for those on Universal Credit forced to take out advanced budgeting loans would be increased from 12 to 24 months, while the £90 charge to take out a debt relief order would be scrapped completely.
Proudly citing the Left-leaning Joseph Rowntree Foundation (JRF) and Trussell Trust, the Chancellor also announced that the Household Support Fund, set up temporarily to help the poorest through the cost of living crisis with a one-off payment of up to £500 depending on circumstances, would continue for another six months.
Yet if proof was ever needed that the Left would never thank the Right for giving them free money, the JRF responded by declaring it “a budget for big earners and big owners”. With friends like these, who needs enemies?
Hunt’s declaration that “the way we treat Child Benefit in the tax system is confusing and unfair” may have been aimed at pleasing family-orientated New Conservatives like Miriam Cates and Danny Kruger. But in fact the decision to raise the High-income Child Benefit Charge threshold from £50,000 to £60,000 – and guarantee rates for childcare providers – could equally have been taken straight out of mother superior Stella Creasy’s Labour playbook.
Hunt accused shadow chancellor Rachel Reeves of “acting like a Tory”, but his boast that “overall spending on public services has gone up since 2010 – in the case of the NHS by over a third in real terms” was positively Blairite.
Although he insisted that “we need a more productive state not a bigger state”, the extra £5.9 billion pledged to the NHS speaks to the theory that the state is fast resembling the NHS, with other departments attached (those worried about the prospect of a Third World War will have noted the distinct lack of extra defence spending).
Moreover, while yet more health spending may help to nullify Labour’s claim to be the party of the NHS, voters are unlikely to view “digitisation” as the answer to historically high eight million-strong waiting lists, considering the chequered history of such “groundbreaking” IT projects.
At 27 points behind Labour according to the latest Ipsos Mori poll, Tories had been crying out for tax cuts.
Instead, these were reserved for the Lefty “luvvies” of the creative industries while those with second homes (also known as Conservative voters) saw their furnished holiday lettings tax regime abolished along with non-dom status. Business class flyers (also known as Conservative
Jeremy Hunt presented a Gordon Brown Budget rather than a Nigel Lawson one
The Tories’ new slogan appears to be: ‘We might be poor, but Labour will be even worse’
voters) will also pay more in airfares. Stick that in your socialist pipe and smoke it!
Granted, property capital gains tax was reduced from 28 per cent to 24 per cent in what Hunt joked was a win for “Two Homes” Angela Rayner – but this wasn’t the overall capital gains tax cut the Tories had been hoping for, not least after the Chancellor halved the Annual Exemption Allowance in last year’s Autumn Statement. Investment tax allowances didn’t move an inch either, while small and medium-sized businesses are unlikely to be moved by a meagre £5,000 rise in the VAT registration threshold.
The scrapping of the tourist tax called for by big businesses was also conspicuous by its absence.
Hunt repeatedly ribbed Labour for being the party of high taxes, but with the income tax threshold still frozen, the truth is that more and more middle earners will be fiscally dragged into paying more tax – regardless of his extra “2p” off National Insurance.
Had the Chancellor really wanted to be radical, he would have followed up on his statement that “the double taxation of work is unfair” by scrapping National Insurance altogether. Instead, it was left to special advisers to brief that this might be something for the future.
“Our long-term ambition is to end this unfairness,” Hunt insisted. Yet as one opposition MP pointed out: “You’ll be long gone by then.”
Naturally, the One Nationers welcomed the Budget with open arms, praising the Chancellor for his “compassion” in “providing clarity on our childcare plans” and investing “in the future of our public services”.
Yet the distinct lack of Right-wing support was deafening. Those hoping for a Budget they could sell on the doorstep to rival Reform’s true blue manifesto will now seemingly have to settle for a long-term “growth” budget that will only result in 1.7 per cent growth come 2028-29, according to the gloomy Office for Budget Responsibility.
The Conservatives’ new campaign slogan appears to be: “We might be poor, but Labour will be even worse”.
The trouble for the Tories is that is not fighting an election from the centre ground – but underground, dead and buried.