The Budget is one of the most important days in the political calendar and also the public affairs calendar. The initial focus is rightly on the individual details contained in the Budget. But we also need to think about what it tells us about the direction of Government policy and where it might go.
What the Budget didn’t say
The Budget is being paraphrased as ‘spend now, tax later’ and when you look at, for instance, the plans to increase Corporation Tax there does seem some truth in that. But there are also cuts as well and whilst the Prime Minister refuses to use the ‘a’ word, austerity, there were elements of the Budget that did look like austerity.
All this is set against the backdrop of the party’s manifesto that talked of a ‘low tax economy’ and said: “we as Conservatives want to give you freedom – low taxes, opportunity, the chance to realise your dreams”. Of course that was all pre-Covid but when the Budget was being discussed in advance of the day, many Conservatives, not least the PM apparently, were quick to remind the Chancellor of the manifesto commitment that ‘we promise not to raise the rates of income tax, National Insurance or VAT’. So that tells us that the manifesto still means something.
Fundamentally, the Government will want to avoid the biggest tax increases, especially of the scale proposed, at all costs. No Government wants to do them, let alone a Government with those clear manifesto commitments. That explains, at least in part, why the Corporation Tax changes are slated for 2023 which may well be after the next General Election. Or what better message to go into an election with than ‘we have been so successful economically that we don’t have to make the increases (or not as big)’?
Don’t just focus on announcements
That starts to help us understand what the Budget means away from the immediate announcements and into the realm of what it tells us about the Government’s approach over the coming years. We must also not forget that the Budget is only part of the Government’s financial approach, the other part being the Spending Review.
So, we should not see the Budget as a one-off event but as part of the Government’s overall narrative. The newspaper headlines are important but public affairs has to go beyond that.
Obviously, there were the big themes for the Government such as ‘levelling up’ with the announcements on Freeports, various funds for towns and areas, and the locations of the UK Infrastructure Bank (my emphasis added) and a Treasury campus in Darlington.
What the Budget really said
But were there any less high profile elements? I would point to the Chancellor’s section on ‘building the future economy’. This highlighting ongoing issues of productivity but also moved the government onto green growth. With COP 26 at the end of the year, this suggests that we will see this theme developed during the course of the year with a series of policy announcements.
The Budget, as mentioned above, provided a reminder that the party’s manifesto remains important, so will help shape the forthcoming Queen’s Speech, and with continued announcements on levelling-up and climate change that there is a real need for organisations to consistently put messages to government.
So, whether it is helping deliver a post-Covid growth agenda, providing policy ideas in the run-up to COP 26, navigating the Brexit world or ensuring that you aren’t forgotten during ‘levelling-up’ discussions, the Budget showed us that engagement is critical.