Budgets are always big moments in the parliamentary calendar and next week’s budget will be bigger than most. Not only is it the first budget of the new Government but the economic and financial backdrop is the worst for a long time.
When we were in Opposition, we were made aware of a pre-election £20 billion gap in the finances. What the new Government didn’t know, until we crossed the threshold of office was, that was only half the story. Emergency reserves had been spent three times over risking an annual shortfall – a black hole – of a further £22 billion. So, the more than £40 billion the Chancellor will need is just to balance the books and not to pay for any future investment.
What is in the Budget is a closely guarded secret, but most budgets are a combination of tax change, spending commitments and election pledges limit the choice that new Chancellors have.
The Budget itself is a big moment followed by five days of debate before any measures go into committee for line-by-line scrutiny. It is also a rare occasion when the Leader of the Opposition replies and it’s rumoured that this speech may be the last Rishi Sunak makes as an MP.
The audience of course is not just MP’s. It’s to a wider audience including businesses and the financial markets. Investors are key to growth and as last week’s successful investment summit showed they will be expecting that the political stability which ought to come with a big majority is matched by economic stability flowing from a responsible budget.
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