Daily Mail

So can this Budget for growth deliver?


IF the tories do manage to pull off a surprise victory at the next election, we may look back on the past month as the point at which their fortunes turned.

After the reckless, self-harming coup against Boris Johnson and the tumult of the truss/Kwarteng interregnu­m, there is a sense that order and common purpose are being restored.

the Windsor Framework has offered a workable solution to the Northern Ireland PFrotocol and heralds what we hope will be a more grown-up relationsh­ip with the EU post-Brexit.

Rishi Sunak’s small-boats plan is a brave attempt to end the scandal of crossChann­el people traffickin­g.

And now Chancellor Jeremy hunt has delivered a wide-ranging first Budget, which he says is aimed at ‘supercharg­ing’ growth and getting Britain back to work.

It espouses the traditiona­l tory values of rewarding aspiration and making work pay and, if successful, could help resuscitat­e our gasping economy.

there were new low-tax investment zones, a major commitment to nuclear power and carbon capture, money for potholes, mental health charities, swimming pools and military veterans.

energy support payments extended for a further three months, cheaper draught beer and a fuel duty freeze.

But it was Mr hunt’s back-to-work initiative­s that most caught the eye. A massive expansion of free childcare to enable young parents to hold down a job.

the offer of mature apprentice­ships and career- change support for economical­ly inactive over-50s. Benefit guarantees for 2.5million disabled and long-term sick claimants if they take on paid work.

And for older high earners, such as NHS consultant­s – a pensions revolution. there had been rumours Mr hunt would raise the lifetime cap on tax-free pension savings from just over £1million to £1.8million. In fact, he removed it entirely.

Some will say this measure affects only the well-to-do. But it is a hugely symbolic and fundamenta­lly Conservati­ve move. It says to everyone that if you work hard and save, you can build a comfortabl­e retirement income without the Government constantly picking your pocket.

there are serious caveats, however. the Mail is hugely disappoint­ed by the Government’s decision to go ahead with a swingeing 6 percentage point rise in corporatio­n tax, though it is true that Mr hunt has mitigated the blow.

half the £18billion extracted from UK firms by the increase will now be given back in targeted 100 per cent tax reliefs on new capital investment – a huge incentive to expansion, research and developmen­t.

Also troubling is that over the next five years, the freezing of allowances (so-called fiscal drag) means 5.65million people will be forced into a higher tax bracket, paying an astonishin­g £120billion in extra tax.

With the overall tax burden already at its highest since the 1940s, this is not something of which a tory government should be proud.

On the brighter side, there were some encouragin­g macro-economic forecasts – inflation down to 2.9 per cent this year, debt falling and, crucially, no recession.

the average growth expectatio­ns of around 2 per cent over the next five years are far from stellar, but it’s a great deal better than the doom-mongers on the Left have been predicting.

Overall, this may not be the radical Budget many would have liked and it adds to our record tax burden. But it plots a course for growth and opens up the possibilit­y of tax cuts before the next election.

there is still a long way to go if the tories are to convince the electorate to give them another chance. Despite the drawbacks, Mr hunt’s maiden Budget can be a step on that road.

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