We were promised a relatively dull Spring Budget. That’s exactly what we received. Phillip Hammond was not delivering an Osborne style budget – it was rather straight laced; there were no taxes imposed on any form of pastry-based goods. This Budget was not controversial; it was miles away from the so called “Omnishambles Budget” of 2012 where the media and MPs in the Conservative Party came out in full force against the pasty tax, the caravan tax and the charity tax.
However, there are definitely some parts of the Budget which are going to grate on Conservative MPs. Firstly, the more fiscally conservative Conservatives and the [former] Osbornites are going to continue to be unhappy with the slowdown of the deficit reduction timetable. The budget deficit is predicted to be £16.8bn in 2021-2022 when a balanced budget was meant to be delivered at the end of the last Parliament, and then this Parliament.
Some pro-remain Conservative MPs might be placated with a bit more clarity around a post Brexit financial plan. However, Hammond’s statement did not go into significant detail on post a Brexit plan and the Government is going to continue to feel the pressure on needing more information as the triggering of Article 50 approaches.
Additionally, those fiscally conservative Conservatives are likely to take opposition to the fact that UK firms will be paying billions more in business rates over the next few years. The OBR’s new forecasts show business rate income rising to £33.7bn in 2021-22, up from £28.8bn in the current financial year.
Finally, the increase of National Insurance Contributions (NICs) have potentially broken the Conservative Party 2015 Manifesto promise. David Gauke MP (Chief Secretary to the Treasury) is arguing that raising class 4 national insurance contributions isn’t what the Conservative Party meant in their 2015 Manifesto. Make what you will of that. However, this, combined with the increase in business rate income, might see some opposition in Parliament over the coming days.
On the other hand, this is the final (rather dull) Spring Budget. Labour is in a complete mess. Jeremy Corbyn’s response to Hammond’s statement was completely unremarkable. The Conservative Party have a small majority. There’s a chance that Conservative MPs will not want to give the Labour Party anything that looks at all like a victory – so they may very will let it pass without much fuss.
Authored by Helen Roberts