When is a Budget not a Budget? If this (highly unlikely) were a Christmas cracker teaser then the answer would presumably be: When you call it something else.
Rachel Reeves says she will not hold a tax raising Budget in the spring but instead issue a statement to MPs alongside new fiscal forecasts.
But the Chancellor already has developed a reputation for dancing on pinheads, which doesn’t offer very much confidence.
When Reeves delivered her ‘fixing the foundations’ statement on July 30 this year, with its amazing discovery of a £22billion black hole, she didn’t hesitate from slipping out ‘savings’ amounting to £5.5billion in the current fiscal year and £8.2billion in 2025-26.
This included axing the winter fuel allowance for pensioners, cancelling plans for social care and axing up to £800million for AI research at the University of Edinburgh.
What the Chancellor has not ruled out in the spring is a further squeeze on public spending should the Office for Budget Responsibility find her off course to hit fiscal targets.
Kicking the can: Rachel Reeves says she will not hold a tax raising Budget in the spring but instead issue a statement to MPs alongside new fiscal forecasts
That looks likely given data showing the economy stalling rather than expanding.
Stumbling output means lower tax income, rising welfare bills and more borrowing. The March 26 statement to MPs may yet pre-empt a further public spending review promised for July.
Confused? Most people will be. The nation may only be treated to one official Budget a year, but there will no shortage of financial statements and mid-course corrections. Labour words must be watched.
No National Insurance increases were reinterpreted as no employment tax on working people. Imposing a National Insurance charge of £25billion on employers was fine.
A consequence of hitting employers so hard is that the Chancellor is now rethinking the second stage of the pensions review.
The first part was all about amalgamating funds and unleashing them to invest in the UK.
The second stage was to focus on whether automatic enrolment into defined contribution plans is good enough to generate a comfortable retirement.
At present, 8 per cent of income is mandated into such funds with a minimum 3 per cent coming from the employer.
But having ladled National Insurance on to employers, Reeves now thinks that imposing more pain on businesses may not be wise.
This looks to be another case of postponing difficult decisions, which eventually could add to burdens on the Exchequer.
The worry about all of this is unpreparedness for the unexpected. The financial crisis, pandemics and Ukraine war all showed how events can overwhelm best policy intentions.
A nation paying its highest peacetime taxes won’t want to see the Chancellor reaching deeper into the pockets of citizens and firms. But closing the door is nonsensical.
Creative tension
The arrival of Paddington Bear film maker Canal+ turned out to be a damp squib rather than a fillip for the London market.
There may be technical reasons for the share price tumbling – French tracker funds sold their holdings – but it has not been the vote of confidence anticipated.
Support for creative industries in Britain – which at a stretch claim up to 10 per cent of national income – is critical. UK creative groups, including publishers and authors, see a big threat to the exclusivity of their output on the horizon.
The use of AI to replicate patterns of words, bars of music, film clips and the like, breaching copyright, is a huge threat.
Much the same problem was highlighted when Google, in its early days, purloined chunks of published works and when pirates attacked songbooks.
The Government is promising a consultation. Knowing the speed at which such reviews are conducted, there is danger that by the time Whitehall gets to grip with a complex legal and creative issue the bird will have flown.
There must also be concern that with Labour embracing big tech, as incoming UK investors, they will treat Silicon Valley with kid clothes at the expense of artistry and originality.
That should never happen.
Lost bags
Here is a bit of technology to cheer. British Airways is to install Apple AirTags into its luggage handling systems with the aim of speeding up the process of locating and delivering wayward cases.
That could reduce cost for the carrier and ease anxieties for travellers. It shouldn’t be an excuse for lowering performance standards.
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