It was not a mini Budget, but it was rather small. It might be called the “micro Budget”.
Small does not necessarily mean bad, but it clearly falls short of radical action to create a promised new economic model.
A new “theory of growth” was not unveiled as promised by the prime minister Andy Burnham.
It was preamble, roadmap, consultation, perhaps the starter to the main course, which appears to be the PM’s 10-year plan next month.
It went unsaid, but the clear stategic aim of Healey’s statement was to be the “anti-mini Budget”.
This “steady as she goes” predictable fiscal event set out to avoid the aftermath seen following Liz Truss’s mini-budget, in which unexpected and unfunded tax cuts spooked the bond and currency markets.
The markets didn’t even flicker on Healey’s announcement of £65bn of extra borrowing over the next five years – government interest costs have actually fallen since Wednesday, against the backdrop of market turmoil due to the US-Iran war.
The core of the Budget was to get Downing Street through the impacts of the Middle East conflict shock on energy and borrowing costs.
If these pressures prove enduring there are some unpalatable decisions that will have to be grasped within the next year. The can will have to be picked up rather than kicked down the road again.
It buys more time, more “breathing space”, as it were, for the government and the prime minister’s long-term strategic plans.
The detail may come more quickly than feared. On welfare, the Milburn Review process is clearly heading for some sort of welfare-to-work scheme, even a separate system for younger workers.
It will cost money up front to subsidise work opportunities and hope to save more from welfare bills in the future. The chancellor saw at close quarters Gordon Brown do this twice two decades ago.
The Office for Budget Responsbility’s (OBR) economic forecast showed the sheer rise in the welfare bill, which is set to jump to £431bn in 2031, if pensioner support is included.
There are two further areas where the chancellor laid down markers, with little fiscal cost, in terms of the long term plan.
