It’s inevitable that when there is a change of government, a lot of effort from the incoming administration goes into ‘framing’ the situation. There’s a lot of sucking of teeth and shaking of heads as ministers ‘get their first look under the bonnet’.
But even by normal political standards the current framing exercise could most charitably be described as a stretch. To say the economic inheritance is the worst since World War II - as ministers have - is clearly ludicrous. You have only to look as far back as the last change of government in 2010 to see that.
In 2010, there was an annually recurring budget deficit of £155bn, inflation was higher, unemployment was higher.
And as for a supposed ‘black hole’ in spending plans, that doesn’t wash either. Because of the existence of the Office for Budget Responsibility, created in 2010, the finances were well known — the ‘bonnet’ was already open.
Ministers say they found in-year additional cost pressures. But there are always in-year additional cost pressures.
In any department when you join as a minister the officials brief you about unfunded costs that have emerged during the year; the same is true in aggregate for the Treasury. These are not a mysterious ‘black hole’; they are budget pressures, and you have to make choices, sometimes difficult ones, to stay on budget.
The current ‘framing’ appears to be part of a wider process of ‘pitch-rolling’ – preparing the ground for what is to follow.
During the election campaign, there were many questions about which taxes an incoming Labour government would increase to fund want they wanted to do. But there were few answers, aside from VAT on private school fees.
Here in East Hampshire, one of the issues that many of you have been writing to me about is the implications of that VAT rise, which is now to be brought forward.
There are issues nationwide around military families and families of children with special educational needs. No one knows how many children will be displaced from independent schools, in the short term and over time.
The widest-impact question of all around this is: what will the effect be on state schools, class sizes, school choice? As I have said, while taxing education is wrong-headed in multiple ways, accelerating it without adequate time to prepare risks even greater disruption.
The severe curtailment of the winter fuel allowance is a very regrettable decision. This isn't just taking away from "well off" pensioners - it will adversely affect many on lower incomes just above the Pension Credit eligibility line. The Herald and Post reported last year that over 27,000 people in East Hampshire district got a winter fuel payment.
I am also very concerned about the plan to “review” the hospital-building programme, which includes the replacement of the current Basingstoke & North Hampshire hospital. In answer to a parliamentary question I tabled, the health minister said there would be “a full and comprehensive review” but nothing concrete on timing, despite Sir Keir Starmer’s assurances before the election.
It’s part of a wider apparent equivocating on previously-committed infrastructure projects, despite the Chancellor’s previous bemoaning of a ‘stop-start’ attitude on capital spending.
The Chancellor repeatedly talks about tough decisions needing to be made. To govern is indeed to choose. Come the Budget, we shall see more what the new government’s choices are.
