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.
The TON Foundation distanced itself from initial Golden Visa claims, saying the move is an independent initiative with no official backing from the United Arab Emirates government.
Building society chiefs will this week intensify their protests against the chancellor’s plans to cut cash ISA limits by warning that it will push up borrowing costs for homeowners and businesses.
Sky News has obtained the draft of a letter being circulated by the Building Societies Association (BSA) among its members which will demand that Rachel Reeves abandons a proposed move to slash savers’ annual cash ISA allowance from the existing £20,000 threshold.
The draft letter, which is expected to be published this week, warns the chancellor that her decision would deter savers, disrupt Labour’s housebuilding ambitions and potentially present an obstacle to economic growth by triggering higher funding costs.
“Cash ISAs are a cornerstone of personal savings for millions across the UK, helping people from all walks of life to build financial resilience and achieve their savings goals,” the draft letter said.
“Beyond their personal benefits, Cash ISAs play a vital role in the broader economy.
“The funds deposited in these accounts support lending, helping to keep mortgages and loans affordable and accessible.
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“Cutting Cash ISA limits would make this funding more scarce which would have the knock-on effect of making loans to households and businesses more expensive and harder to come by.
“This would undermine efforts to stimulate economic growth, including the government’s commitment to delivering 1.5 million new homes.
“Cutting the Cash ISA limit would send a discouraging message to savers, who are sensibly trying to plan for the future and undermine a product that has stood the test of time.”
The chancellor is reportedly preparing to announce a review of cash ISA limits as part of her Mansion House speech next week.
While individual building society bosses have come out publicly to express their opposition to the move, the BSA letter is likely to be viewed with concern by Treasury officials.
The Nationwide is by far Britain’s biggest building society, with the likes of the Coventry, Yorkshire and Skipton also ranking among the sector’s largest players.
In the draft letter, which is likely to be signed by dozens of building society bosses, the BSA said the chancellor’s proposals “would make the whole ISA regime more complex and make it harder for people to transfer money between cash and investments”.
“Restricting Cash ISAs won’t encourage people to invest, as it won’t suddenly change their appetite to take on risk,” it said.
“We know that barriers to investing are primarily behavioural, therefore building confidence and awareness are far more important.”
The BSA called on Ms Reeves to back “a long-term consumer awareness and information campaign to educate people about the benefits of investing, alongside maintaining strong support for saving”.
“We therefore urge you to affirm your support for Cash ISAs by maintaining the current £20,000 limit.
“Preserving this threshold will enable households to continue building financial security while supporting broader economic stability and growth.”
The BSA declined to comment on Monday on the leaked letter, although one source said the final version was subject to revision.
The Treasury has so far refused to comment on its plans.