Chancellor Rachel Reeves presented Labour’s first budget in 14 years by promising to put an “end to short-termism”.
British governments typically see budgets as an opportunity to present policies providing short-term gain in terms of public popularity, even if they do little to improve Britain’s long-term economic prospects. Over the past ten years, governments have adopted and then abandoned 11 different economic strategies, and seven different fiscal rules.
The last Conservative government’s budget contained a range of tax cuts, most notably a 2p cut on National Insurance. Little consideration was given to the medium-term implications of these cuts. Labour inherited a funding squeeze, alongside the need to balance the books over a five-year period based on the previous fiscal rules.
