The Big, Boring, Budget

John Healey, in the opening of his first-ever delivery of the Autumn Budget, told the Commons, “this is a Budget for working people”. He was frank and open about how a stormy global economic environment, fuelled by wars on multiple continents, called for greater fiscal discipline. Healy acknowledged how these wars, especially in the Middle East, are driving up the cost of living. It was a brutally honest confirmation of what we already knew - the money we spend just to stay alive in the UK is rising. The fact that Healey decided to acknowledge these problems from the get-go, instead of blindly offering to solve them, gave the impression of a Chancellor who was not going to over-promise and under-deliver. It felt reassuring.

It certainly helped that in the lead-up to the Budget Healey had already postponed a lot of big decisions to next year’s Spending Review: funding a large increase in defence spending was next year’s problem, as was any large-scale reform to public services and the welfare system. Forecasters expected an uneventful Budget, safe from overwhelming market or public fallout, and ultimately Healey delivered just that, giving a Budget which felt well thought-out, safe and reliable - a Budget that, whilst definitely unambitious, was not going to cause a great upset. There was also the added bonus that the OBR did not accidentally leak its entire Economic and Fiscal Outlook report prior to the Budget this year, in contrast to the government’s embarrassing 2025 Budget leak.

Listening to Healey speak, I breathed a sigh of relief. A Big, Boring Budget is what we needed. 

That’s because this Budget was competent whilst remaining realistic. It was aimed squarely at tackling the short-term needs of today’s public instead of trying to solve complex issues like youth unemployment or boosting our military capabilities. This was a set of small decisions made by a person with extensive experience in the Treasury to help, not solve, decisions which will chip away pounds and pence here and there to make the difficult period we are in now just that little bit more manageable. £100 straight to the bank accounts of those in Council Tax bands A-D to be used towards their energy bills, a lowering of tariffs for some supermarket items to save £21 per year, the complete removal of standing charges for gas bills to save £45 per year, all small gestures which will be noticeable to people with the lowest incomes. 

Alongside these here-and-there measures, the Budget also laid out more sweeping policies without overpromising. There was the expected rise in the Minimum and National Living Wages, both up 3.9%, and an increase from 45p to 55p in the tax-free mileage allowance on vehicles used for work has now been made permanent. There was also the establishment of a new First-Time Buyers ISA from 2029, and a reduction from 25% to 20% on the penalty for using the current Lifetime ISA when buying a property more valuable than the current cap. Additionally, there was an appealing measure targeted towards self-employed men, making sure they too now qualify for Statutory Paternity Pay.

Alas, all initiatives need funding, and so the Budget was not all sunshine and rainbows. The freeze on income tax thresholds has been extended to 2031, which will slowly drag people into higher tax brackets, something which the OBR has said could create a total fall in labour supply equivalent to 215,000 people by 2031. Additionally, something which will affect the general population will be the increased taxes on rental property income and savings income, both up 2%. There were also smaller tax raises on places like vape shops, an increase in the gambling sector’s Machine Games Duty. On top of this there was also the expected Bank Levy hike, though with a positive caveat that this doubling to 6% will only be enforced for 15 months. 

This budget will have its critics, and I am sure those heading up places like the Ministry of Defence and the NHS will be upset that the drastic reform they’ve been promised has not been addressed today, but here’s the bottom line: this Budget provides stability. Is it addressing our armed forces, food production and NHS waiting lists? No, obviously not. Attempting to address these issues today would have meant breaking fiscal rules and completely eroding the headroom the government is trying to build.

Because this Budget has not been a great show of Labour chest-beating and promising drastic cross-departmental reform, there are no further Council Tax hikes planned on top of what Reeves brought out last year. There are no more sweeping measures targeting salary sacrificed pension contributions, and I breathed a sigh of relief knowing I was not going to start paying back my Plan 2 student loan at a higher rate. The reason the Big, Boring Budget is big and boring is because it has been deliberately muted to not over-promise, and not erode the credibility of this government. 

Some could describe this Budget as forgettable, but for me this is the very reason I approve of it. Markets, and the people, wanted calm and importantly, the Budget reinforced something that the Burnham administration has been signalling all along: a return to stable politics.

Image: Flickr/HM Treasury

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