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Any budget with £40 billion of tax rises, affecting almost all citizens, will never win hearts and minds.
The difficulty with Rachel Reeves’s first effort at the dispatch box is that it has pleased no one, not even those who oversee the UK’s tax affairs.
Even the saintly Office for Budget Responsibility (OBR), which the Chancellor has tried to keep on her side, had doubts.
Open door: Although the Treasury is naturally conservative in its fiscal thinking, the left-leaning content of the Budget was not going to receive much pushback.
Downgraded growth forecasts beyond 2025, higher inflation projections, debate in the OBR report about “fiscal illusions” and difficulty in controlling recast debt rules all point to vulnerabilities in Reeves’ approach.
When Gordon Brown inherited the Treasury in 1997, he did not think it was suitable for Labour’s purposes. Among the first victims was the permanent secretary Terry Burns, considered in his opinions too free of a market.
No such radical change was necessary for Reeves. He appears to have been pushing an open door.
Although the Treasury is naturally conservative in its fiscal thinking, the left-leaning content of the Budget was not going to receive much pushback.
An expansion of the State financed with greater national insurance burdens and “spiteful” punishments for small farmers and businesses, non-domiciled taxpayers,
North Sea oil drillers and other wealthy taxpayers got the nod.
The lack of a growth agenda – let us hope it has not been suppressed – is a worrying gap. The statist approach must have been a relief to officials after 14 years of Conservative government.
Permanent Secretary James Bowler, who worked under Brown and the late Alistair Darling, is experienced and knowledgeable.
He is seen as less likely to challenge ministers than his predecessors Tom Scholar or Nick Macpherson.
The Treasury complied with the quick and dirty audit demanded by Reeves and it resulted in a £22bn black hole.
It allowed careless speculation to run rampant, leading ordinary tax-paying citizens to collect pension lump sums and make other unnecessary personal decisions.
The debt margin was created by weakening the foundations with the adoption of the debt measure with respect to the national production of the Public Sector Net Financial Liabilities (PSNL). None of this favored the Government.
Skepticism at the Institute for Fiscal Studies, questions raised by credit rating agencies S&P and Moody’s, and setbacks in consumer and business confidence are all unintended consequences.
Wise advice has been lacking.
trench warfare
Given the trajectory of Burberry’s share price this year, down 39 percent before yesterday, it only took speculation about the offer to send the stock soaring.
Even the saintly Office for Budget Responsibility (OBR), which the Chancellor has tried to keep on her side, had doubts.
The thought of the venerable British luxury brand being taken over by nouveau riche puffer jacket maker Moncler fills us with horror. Moncler does not hide its ambition to “consolidate the new luxury segment.”
The growing power behind Moncler’s throne is luxury superpower LVMH, which took a seat on the board.
Burberry chairman Gerry Murphy needs to be careful what he wishes for. Net-a-Porter, the latest UK luxury brand to be taken over by the big beast Richemont, has failed under new ownership and been sold for a song.
Burberry has been warned.
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