Jeremy's Blog 25th October 2024: A Budget to Define the Government

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 24th October 2024

In less than a week’s time we will (at last) have this Government’s first Budget. Originally indicated for the first half of September, it has been built up as the event that will frame the character of this Government. From financial markets to farms, we are forewarned that the Chancellor will announce substantial tax increases and revised spending figures for this financial year but it is their manner and accompanying statements that will complete the picture.

Since July, an atmosphere of anticipation has been built up for this to be the key event in understanding this Government and what it might intend to do and achieve in the next 4? years. At the same time, we are watching a government finding its feet: learning on the job, meeting the realities, difficult questions and ceaseless surprises of being in office, weighing he trade-ffs between goals and finding the right language.

The delay, to almost four months after the election, has created an extended frenzy of speculation as to what the Budget might do. Without further development, the slogans and phrases of opposition and campaigning have been ever more closely scrutinised and tested for what meaning they might have, perhaps beyond the point where they stand that analysis. Expectations have driven activity in the marketplace with an early indicator in September’s CGT receipts being the largest since September 2008.

With all else that the Budget is said to have to do for public finances, a key question is whether it can be the foundation for the “most pro-growth, pro-business” government the country has seen? For Britain to be “the best place to start and grow a business”? Improving growth has been repeatedly stated as the overriding mission of this government and so the focus of work for Keir Starmer and Rachel Reeves. The Budget may be the clearest indication as to how far that is more than words.

The last four months have been strange ones for the business of government and policy development. The snap election left many policies in mid-air with their fate unknown. On being elected, the new government did drive hard and fast in July with announcements and decisions on planning, housing, energy and infrastructure.

However almost all other areas, including agriculture, have seen very little with ministers apparently constrained until the Budget with its new spending limits for this year.

It may well be that much policy work is going on behind the scenes in readiness for the post-Budget period and future action but there are few external signs. For DEFRA, SFI remains at the Expressions of Interest stage with members reporting slower processing of applications. A decision was to have been made on Countryside Stewardship Higher Tier in July but it might now be hard to implement anything for January. There has been no move on capital and productivity grants. This autumn was to have seen a third round of the Slurry Infrastructure Grant. In turn, this seems likely to lead to further underspending with at least a four months hiatus in decisions and just five months left of this financial year. That pattern seems to apply across other government departments.

That could see a wave of pent-up announcements, actions and consultations released in the weeks after the Budget, perhaps from famine to feast, but it may now be hard for some scheme decisions to have significant effects in the rest of 2024/25.

Beyond this lies the March Budget, expected to bring the spending decisions for 2025/26 and 2026/27, so only then making it known what money DEFRA and the devolved governments would have for agriculture from April.

This step-by-step, paced approach may be very orderly and structured but we live in an increasingly chaotic world in which families and businesses cannot so easily afford the time out from public policy development.

The transition from the easier life of Opposition to the trade-offs and responsibilities of Government is a large one. Is the Government, with its majority, going to manage the accelerating change we face or more often express frustrated reactions to it? Next week’s Budget has been made key to that.