Posts Tagged ‘budget’

Key takeaways from MHP’s Budget Briefing event

Posted on: March 7th, 2024 by Alexandra Stamp

The event was moderated by James Gurling OBE – Executive Chairman of Public Affairs at MHP Group, with panellists:  

  • Stephen Hammond MP, Treasury Select Committee and Former Minister of State  
  • Alistair Strathern MP, Parliamentary Private Secretary to the Shadow Chancellor  
  • Madeleine Grant, Parliamentary Sketchwriter and Columnist, The Telegraph  
  • Sonia Sodha, Columnist, The Observer  
  • Asa Bennett, Assistant Editor, Daily Express  
  • Chris Hopkins, Political Research Director, Savanta  

Proceedings began with Chris Hopkins, Political Research Director at Savanta, outlining the results of their overnight snap poll of public reaction to the Chancellor’s Budget announcements.  

The immediate public reception to the Budget has been muted, with support for the Spring Budget down 16 points on support for the Autumn Statement four months ago. Labour led the Conservatives on economic trust by 11 points, and 60% of UK adults do not believe that the Government’s plan for the economy is working; an increase of 11% since the Autumn Statement. 75% of UK adults do not believe that the Spring Budget will be enough to help them with the cost of living, and two thirds feel that the Budget will not benefit them or their family.  

Of the specific announcements, 61% support the Chancellor’s headline announcement to cut National Insurance by 2p, and 59% support the extension of the windfall tax on oil and gas. However, less than 50% of respondents supported the Chancellor’s announcement to abolish the non-dom tax status, potentially indicating that the public are not supportive of the Government’s perceived ‘stealing’ of Labour’s headline tax announcement.  

Quipping that the level of leakage of this year’s Spring Budget would have been a ‘sackable offence’ several years ago, Stephen Hammond MP began the panel analysis with a Conservative perspective on the Budget. He outlined that while immediate public reaction may be subdued, the long-term outcomes of the Budget will be incredibly positive for the UK.  

Speaking on NHS productivity specifically, Hammond argued that the measures introduced here would have significant and lasting benefits for the NHS without placing a significant cost on the taxpayer. However, given the lack of enthusiasm for the Budget announcements, Hammond did outline that his prediction for an election date would now be November, rather than May as has been rumoured over the last few weeks.  

Providing Labour’s response, Alistair Strathern MP outlined his intrigue regarding the Conservative’s message to ‘stick with the plan’. He argued that if the Chancellor’s idea of sticking with the plan is to take in more and more of Labour’s policy ideas, Strathern questioned how the Conservatives will defend their policies to their voters at election time.  

Strathern also pointed out that the Budget, bereft of any rabbits, showcases the difficult economic situation that the next Government is going to inherit. Additionally, given the decline in living standards that many people across the country have experienced over the last few years, Strathern pointed out that the Budget was lacking measures to get growth back on track in the UK and improve living standards.  

Providing the lobby’s view, Madeleine Grant shared how underwhelming many MPs had found this year’s Budget. Given the details that were briefed over the weekend there was very little surprise, and the contents of the Budget were not – in Grant’s view – enough to shift the dial for the Conservatives. Like Hammond, she argued that this has reduced the likelihood of a May election.  

Grant also shared that there was little within the Budget to indicate which policies the Conservatives will prioritise during the next General Election, providing little clue as to what the Government will choose to campaign on nationally over the next few months. Grant reasons that this relatively tame fiscal event was due to the “spectre of Liz Truss hanging over the Budget”, with the Government overcorrecting and stepping nervously to ensure that they do not repeat the relatively recent history of the Truss Mini-Budget.  

Finally, Grant discussed how both Labour and the Conservatives are cannibalising each other’s policy ideas. Given the current state of the economy, there is not much wiggle room for policy creativity and differentiation. As a result, Grant feels that the General Election will be determined on how much the public trust either party with the economy. Given Savanta’s polling, this does not look to be positive for the Conservatives.  

Handing over to Asa Bennett, a former Speechwriter for Liz Truss, to respond, Bennett agreed that the public’s reaction to the Budget and the absence of a rabbit in the Budget means that it is unlikely that the Budget will be used as a springboard into a May election. Bennett argued that the blame for this partially lies with the over-briefing that the Treasury undertook ahead of Wednesday’s statement, muting the rhetorical flair and spin that could be conducted post-Budget. He also argued that the stealth taxes and borrowing from future budgets to fund Budget promises has not been lost on the public, and has muted enthusiasm for the announcements.  

Bennett agreed with Strathern’s point regarding the Conservatives mimicking of Labour policies. He mused out that while the Conservatives want the credit for the Labour ideas which have proven to be successful with the public, he feels that this signifies that the Party is running out of ideas to get the public to vote blue.  

Finishing the panellist comments, Sonia Sodha spoke on the politics of the Budget. Sodha criticised the Chancellor’s messaging around the state of the current economy, pointing out that the economic hardship the public are experiencing day-to-day can’t be dismissed by the Chancellor stating that ‘it will get better’ and ‘the economy is actually doing really well’. There is a significant gap between the Chancellor’s story and people’s lived reality. Spin from the Chancellor, according to Sodha, will not sway the votes of people who are struggling financially.  

Beyond this, Sodha argued that the Conservatives are very clearly attempting to hem Labour in ahead of the election, limiting the policy levers and options available for the next Government. While Sodha sympathised with Labour’s cautiousness with regards to policy, she stated that this risk-averse attitude leaves Labour open to having their policies stolen. On Labour’s lack of Growth Plan for example, Sodha outlines the need for Labour to develop a replacement for their now defunct £28bn green investment commitment, as well as a plan for affordable housing. The Budget was significant in this way, as it set many traps for Labour for when they are in Government later this year.  

Questions from the floor

Questions were taken from the audience, ranging from the potential of another Autumn Statement before a General Election, the need for policy certainty for the energy sector, and the need for energy security and a plan for nuclear power provision.  

From Labour’s perspective, Strathern argued that the Party is prioritising policy certainty and assessment, ensuring that the UK is an appealing and competitive site for investors across the world. Both he and Hammond agreed that Labour need a strong narrative with regards to energy investment and security to soothe any concerns and crowd in investment in the sector.  

There was much discussion about when the General Election would be called. All panellists agreed that a May election appears to be off the cards, but opinions differed on when Sunak may decide to make the call. Hammond thought that a post-Summer recess call may be made to interfere with Party Conference season and avoid headlines about potential new Conservative Leadership candidates to replace Sunak. Strathern agreed that he couldn’t see how another Conference season would be useful to the Conservatives, and any election announcement would take place around this time.  

Sodha disagreed however. She stated that while a strategic and rational Prime Minister would make this choice, she felt that Sunak would try and wait out the polls, calling an election for mid-December to give the Conservatives as much time as possible to achieve a victory at the ballot box.  

Whenever the election is called, as Bennett outlined there is likely to be post-Election fallout on both sides of the aisle. The Conservatives will undertake a period of internal assessment, making drastic changes to their position in an attempt to win back support that they have lost in the last few years. Labour, while having a blank cheque for their first year in power, will quickly need to show that they are delivering change and have a plan for the future of the UK.  

With this in mind, it appears that the turbulence that the UK political scene has experienced of late will not be resolved at the ballot box, and we can look forward to continued change in the year ahead.