The Guardian view on Labour’s budget: bold ambitions and welcome first steps | Editorial
Banks, landlords and gambling firms will pay more as the chancellor begins building a fairer economy and a more active state in a cost of living crisis John Healey’s first budget was a Rorschach test. Supporters saw dozens of measures offering “breathing space” to a public worn down by rising prices. Critics admitted to a slew of announcements but countered that each was modest in value. Underlying both views is that the budget was more ambitious on how a state can do more to protect the public
John Healey’s first budget was a Rorschach test. Supporters saw dozens of measures offering “breathing space” to a public worn down by rising prices. Critics admitted to a slew of announcements but countered that each was modest in value. Underlying both views is that the budget was more ambitious on how a state can do more to protect the public than on how much it spends. The chancellor has taken a small step in the right direction – a tricky feat in a turbulent world. But an economy marked by entrenched inequality and more than a decade of stagnation will need a bigger stride.
The Office for Budget Responsibility’s “pretty grim picture” of living standards exposes the budget’s central weakness: its relief is temporary, while the squeeze on households persists. As the government deficit shrinks and company profits recover, households are expected to move from saving roughly £50bn in 2026 to borrowing roughly the same amount in 2031. By then, mortgage repayments are expected to reach 4.25% of household disposable income – the highest level since 2009. The OBR expects growth to recover from 1% in 2027 to 1.8% in 2029, while weak worker “bargaining power” allows firms to rebuild profit margins. That sits uneasily with Mr Healey’s promises to working people.
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