The shadow of Liz Truss’s mini-budget still looms large. Mr Hunt was taking no risks with the public finances in a budget that was far smaller in tax cuts and policy decisions than the autumn statement.
Normally, when insiders tell you that the chancellor is limited in what he can do – in the context of the economic backdrop and that this budget will be “a proof point” that the prime minister is delivering on his plan, rather than a “poll gamechanger”, a few months from an election – you take it with a pinch of salt.
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When the chancellor didn’t offer up more, the verdict from some senior Tories was swift: “Terrible,” texted one former cabinet minister, “this won’t shift the needle”. Another told me that this budget would make “zero difference” and MPs would be unhappy: “They were hoping for more.”
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What this does tell us is that when Rishi Sunak said his “working assumption” was for an autumn election, he meant it: this was not a budget trying to set the political weather, rather it was aimed at keeping a steady ship.
“Safety first,” is how one former Treasury insider described it, pointing out that the chancellor could have been more aggressive on tax cuts if he had decided to cut back on future spending commitments.
Ahead of the budget there had been lots of chatter that the chancellor was going to shave 0.25 percentage points off departmental spending plans after 2025 to raise another £5bn or so for tax cuts (this could have gone towards another 1 percentage point cut in national insurance) but decided not to do it.
Perhaps he was mindful of polling suggesting the public doesn’t much like the idea of cutting spending on public services, but his decision not to set this trap for an incoming Labour government has left some Tories pulling out their hair.
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One told me: “He could have created a wedge issue by cutting spending assumptions, by a quarter point or even a half point to then use on tax cuts.
“Labour would then have to back tax cuts or spending cuts, and perhaps we could have then pressed them on higher tax question.
“But we’ve done just enough on tax cuts for Labour to accept it. They didn’t create a wedge and MPs were looking for that from an electoral perspective.
“Maybe he had one eye on the Kwateng mini-budget, so didn’t want to take on more risk when it came to the fiscal forecasts.”
Politically too, the tax-cutting chancellor is still facing the double whammy of the overall tax burden of GDP still going up and heading for a 70-year-high by the end of the forecast period (2028-9), while the Institute of Fiscal Studies noted in its budget wash-up that average households would still be worse off going into the next general election than they were in 2019.
Image: Jeremy Hunt and Rishi Sunak during Keir Starmer’s Budget response
Safety first when you are 20 points ahead (Sir Keir Starmer) makes some sense, you don’t want to squander your lead.
But when you’re 20 points behind, your party are clamouring for you to go all out and try to close the gap.
The chancellor and his prime minister have clearly decided that the route to better polling is steady as she goes: a January national insurance cut, followed by another cut in April when energy bills should be coming down too.
The interest rates could be falling, alongside inflation in the summer.
The hope will be then that the feel-good factor is on the up, and the financial forecasts are improving to perhaps give the government the option of more tax cuts.
But right now, this budget doesn’t look like a moment for renewal. A March budget delivered, but still not a spring in the Tories’ step.
Sir Keir Starmer has said he “absolutely” wants Angela Rayner back in his cabinet after she resigned for failing to pay the correct amount of stamp duty.
Speaking from the G20 Summit in South Africa, the prime minister told broadcasters his former deputy is “the best example ever” of social mobility and he is still in touch with her.
Asked if she could make a comeback this side of a general election, Sir Keir said: “I’ve always said I want Angela back. Even back in September at the time I said she is going to be a big voice in the Labour movement.
“Do I want Angela back at some stage? Yes absolutely.
“I think she is the best example ever in the United Kingdom of social mobility – going from a pretty challenging childhood to being deputy prime minister of the United Kingdom. She is the story of social mobility above all other stories.”
Asked if he missed having her around, Sir Keir said: “I’m friends with Angie and I like Angie a lot and we talk a lot. We still do.
She was elected deputy Labour leader by the membership in 2020, and was made deputy prime minister then housing secretary by Sir Keir.
She resigned from all of those positions in September, after it emerged she had not paid the higher rate of stamp duty on a second home she bought in Hove, East Sussex, saving her about £40k.
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7:19
Rayner admits she didn’t pay enough tax
It followed a tearful interview with Sky’s political editor Beth Rigby about the “complex living arrangement” regarding her first home, which was sold to a trust following her divorce to provide stability for her teenage son, who has lifelong disabilities and is the sole beneficiary of the trust.
An investigation by the prime minister ethic’s watchdog found she breached the ministerial code by failing to get correct tax advice, but that she acted “with integrity”.
Ms Rayner is still a backbench MP and recently did not rule out a return to the front bench herself – telling the Daily Mirror during a visit to a care centre in her constituency that she had “not gone away”.
Other cabinet ministers have also supported her return.
During the Labour Party Conference a few weeks after she resigned, Health Secretary Wes Streeting paid tribute to her work on the Employment Rights Bill and said Labour “wants her back and needs her back”.
Chancellor Rachel Reeves has promised to “grip the cost of living” in the budget next week.
Writing in The Mirror newspaper, she acknowledged that high prices “hit ordinary families most” and that the economy “feels stuck” for too many.
But at the same time, she is expected to raise taxes when she sets out economic policies on 26 November as she seeks to bridge a multibillion-pound gap in her spending plans.
“Delivering on our promise to make people better off is not possible if we don’t get a grip on inflation,” Ms Reeves wrote in The Sunday Times.
“It is a fundamental precursor to economic growth. It is essential to make families better off and for businesses to thrive.
“There is an urgent need to ease the pressure on households now. It will require direct action by this government to get inflation under control.”
She said reforms would change the welfare system from “trapping millions of people on benefits” to one “designed to help people succeed”.
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Among the rumoured measures in the budget is an extension of the freeze on income tax thresholds, which would see more people dragged into paying tax for the first time or shifted into a higher rate as their wages go up.
However, Conservative leader Kemi Badenoch said Ms Reeves should “have the balls” to admit that such a move would breach Labour’s manifesto promise not to raise taxes on working people.
Nathan Gill’s actions were “treasonous” but people should not “besmirch everyone else at Reform”, the party’s head of policy Zia Yusuf has said.
Gill, the former leader of Reform UK in Wales, was jailed for 10 and a half years last week after he admitted accepting tens of thousands of pounds in cash to make pro-Russian statements to the media and European Parliament.
Asked by Sky News’s Sunday Morning with Trevor Phillips if the case showed the party was soft on President Vladimir Putin, Mr Yusuf said that would be an “incredibly unreasonable position to take”.
He said: “Nathan Gill, what he did was treasonous, it was horrific, it was awful. He’s been dealt with by the authorities and he deserves the sentence that he got.”
He added: “As far as we’re concerned he is ancient history. I’ve never met him, I had never heard about him until I saw he was in the newspapers. It is unreasonable to besmirch Reform and the millions of people around the country who support Nigel and support our party.”
Gill, 52, was announced as the leader of Reform UK in Wales in March 2021, but quit the party a few months later after he failed to be elected to the Senedd.
He previously led the Welsh wing of UKIP (UK Independence Party) between 2014 and 2016, then ran by Nigel Farage, and was a member of the Senedd between 2016 and 2017, as well as an MEP between 2014 and 2020.
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Gill left UKIP in 2019 to join Mr Farage’s new Brexit Party – later rebranded as Reform UK.
Image: Former leader of Reform UK in Wales, Nathan Gill. Pic: PA
Following an investigation by counter-terrorism police, officers said they believe Gill likely took a minimum of £40,000 in cash.
Prime Minister Sir Keir Starmer demanded an investigation into links between Reform UK and Russia following the case.
Mr Farage’s position on Russia has come under scrutiny in the past. He faced a backlash during the general election campaign when he spoke about the incursion of NATO and how “we provoked this war”in Ukraine.
Speaking to Trevor Phillips, Mr Yusuf insisted his boss has never supported or been sympathetic to Russia’s decision to invade Ukraine, saying it is “not Nigel’s position that ‘we provoked the war’.”
He said: “When he [Farage] was pressed as to how he would respond if he was prime minister and Russian jets encroached into NATO airspace, his view was that those planes should be shot down. We are crystal clear about our position.
“I would also say this: the notion that Vladimir Putin, the murderous dictator, is making decisions based on what Nigel Farage is saying here in England, I think is for the birds.
“We are now in a situation where Ukraine’s sovereignty has been violated, and Vladimir Putin needs to be brought to heel.”
But Labour accused Reform of “pandering to Moscow” following the interview.
Anna Turley, chair of the Labour Party, said Mr Farage has previously called Mr Putin “the leader he most admired and has repeatedly parroted Kremlin talking points”.
She added: “Reform must urgently allow an independent investigation to root out pro-Russia links, to assure the public that Putin holds no sway over their party or its representatives.”
Police have confirmed Mr Farage has not been part of the investigation into Gill.
Mr Farage said on Friday: “An investigation into Russian and Chinese influence over British politics would be welcome.”
The Reform UK MP for Clacton had previously described his former colleague as a “bad apple” and said he was “shocked” after Gill pleaded guilty to bribery.
He said: “Any political party can find in their midst all sorts of terrible people.
“You can never, ever guarantee 100% that everyone you meet in your life, you shake hands with in the pub, is a good person.”