Read CBW’s Autumn Statement Report 2022 by clicking the image above.

This was a weird budget. It seems to have succeeded in reassuring the markets, although it is not wholly clear why. The Chancellor intends to borrow more, at least in the short term, as the net result of his announcement is to actually increase government spending by £43 billion in 2022/23 and a further £30 billion in 2023/24.

Of course, this is because he is spending £70 billion to subsidise energy costs because Putin is refusing to sell us Russian gas. Who would have imagined that when we introduced sanctions to make life difficult for Russia, that he might retaliate? Obviously not the government, which seem not to have imagined that if we refuse to buy from Russia what it wants to sell us, it may not be keen to sell us other things that we want to buy.

The tax increases are mostly modest. Indeed, the anguished press comments about massively increased taxes are actually because Mr Hunt has not increased them at all; he has left tax thresholds unchanged. If income stays unchanged too, that means there is no tax increase. The criticism is that those whose income increases in money terms will suffer a tax increase in money terms because leaving thresholds unchanged creates an extra tax burden in what the press and trade unions call “real” terms.

It is though a naïve budget. Does Mr Hunt seriously believe that he can create a new silicon valley by more regulation on the IT industry? Does he seriously believe that he can generate growth without addressing the supply side which holds back that growth? Kwasi Kwarteng realised that cutting taxes without supply side reforms would not generate growth. His idiocy was in introducing the tax cuts without making the supply side reforms. However, his prescription was right. Accordingly, the problem with Jeremy Hunt’s budget is what is missing. Not cuts in government expenditure (albeit that it will grow more slowly if he is still around after the next election). No reform of planning laws to get houses built near where the job vacancies are. No scrapping of regulations to free up businesses to concentrate on growth (other than a promised leisurely review of EU imposed regulations).

​And, of course, the abolition of the NI surcharge and social care levy results in not addressing the increasing problem of unaffordable social care – other than the pusillanimous move of passing the responsibility back to local authorities by permitting them to increase council tax by an extra 2%. Indeed, the permission to local authorities to raise council tax annually by 5% without needing a referendum has already generated a complaint by the mayor of Salford as being uneven and unfair, as it means that deprived areas are unable to raise as much through a council tax increase, as wealthy authorities.  Whatever happened to levelling up? Oh, that was the Chancellor before last, Rishi Sunak. I wonder what happened to him?