An enjoyable ordeal

Former New York Governor Mario Cuomo once uttered the words “you campaign in poetry and govern in prose”. In essence, what you say and promise when seeking office contrasts with the hard graft of running an administration when in power. What’s more, sometimes the realities of power collide head on with promises made when out of power.

I suspect the Government have discovered this over their commitment given before the election that a Budget must wait until after the full 13 weeks the Office for Budget Responsibility (OBR) require to produce economic forecasts. At the time, it made political sense – holding up Labour as the paragons of due process and transparency in contrast to the chaos of Liz Truss’s emergency Budget in 2022.?However, once in Government, it left Labour with a three-month gap before big decisions on public spending and taxation could be announced.

This created a vacuum, made worse by initial dysfunction at the heart of Keir Starmer’s 10 Downing Street machine. At times it has felt like the new Government has little to say and no sense of vision or purpose. Cabinet ministers with big public service responsibilities like health, education and policing, desperate for what they hope the Chancellor will grant them in the Budget, left in the meantime with only scraps and morsels to talk about. In private, senior Labour figures must now rue ever agreeing to the policy.

Meanwhile, the pressure on the Budget to be a success has grown, fuelled by the dramatic collapse in the Government’s popularity, with it increasingly resembling a reset moment, just three months since Keir Starmer became Prime Minister. With public services overstretched and under-resourced, and the physical fabric of the country tired and inadequate for the demands of a modern economy, the calls on increased funding are long and loud. Policing, the health service, local government, schools, universities, affordable housing, prisons, transport infrastructure, adult social care, early years, probation or energy – the demand for more money comes from all directions.

Yet the chancellor Rachel Reeves has little room for manoeuvre. Appropriate then that the word budget itself comes from the French bougette, which literally means a small bag – just the right size for the small amount of money the Chancellor claims is available. ??

Some of where the Chancellor finds herself is down to circumstances - there may be arguments about exactly how bad an inheritance it was for the Labour Government, but few can genuinely argue it was anything but tough. Yet, some is also self-inflicted. The Conservatives - perhaps knowing the party was going down to defeat - fought a canny General Election campaign. Over the space of a few weeks, the Tories successfully forced Labour to rule out changes to a whole range of taxes – Labour’s brittleness then under modest pressure the cause of much pain now for the Chancellor. Frustratingly, this included some taxes in desperate need of reform, such as Council Tax.

But the language of tough decisions might be pre-Budget spin if reports that we’ll see some jiggery-pokery with the borrowing rules to free up billions for capital investment are correct. But again, the list here is huge – green energy, HS2, Northern Powerhouse Rail, hospitals, schools, prisons. The Budget will also be a major test of Keir Starmer’s promise to end the London bashing – will the city see money for Euston, housing, the Bakerloo Line Extension, DLR Extension to Thamesmead?

Budget day is full of traditions, but one which has all but died out is Chancellor accompanied at the dispatch box by their favourite alcoholic tipple. Kenneth Clark plumped for whisky, Geoffrey Howe was a gin and tonic man, and Gladstone opted for the strange concoction of sherry and beaten egg (not to be recommended). Given the tight bind that Rachel Reeves finds herself in, the pressure on her to deliver a Budget that reinvigorates a struggling Government and kickstarts economic growth, few would deny her whetting her whistle mid-statement on a peppermint tea infused with Alka Seltzer.

Much has changed since buccaneering 1980s chancellor Nigel Lawson remarked that Budget Day was “best described as an enjoyable ordeal”. The media scrutiny is on another level for starters. That being said, while there’s little that Lawson and Reeves would have in common, after next Wednesday, on it being an ordeal they’ll probably be in total agreement.??

In next week's LDN, we'll bring you the very latest on the contents of the Budget and what it means for the built environment and London.

Nick Bowes

Managing Director, Insight

This is taken from this week's LCA LDN Newsletter, which thousands of decision-makers and opinion formers receive weekly direct to their inbox. To keep abreast of the latest London political and public policy developments that affect the built environment, you can sign up to receive LDN here.