There is a reason the chancellor is the only politician permitted a drink at the despatch box on budget day. Gladstone steadied himself with sherry and a beaten egg, Disraeli with brandy and water. Then, in 1997, Gordon Brown reached for water, and the custom quietly died. John Healey delivered his first budget today with nothing stronger than the cheers of his own backbenchers to keep him going.
Although the fine print says this was Healey’s budget, it was in fact written by the actions taking place 3,000 miles away. The chancellor spoke of the “global economic storms” facing the country, referring to the U.S. and Israel’s war with Iran. The Office for Budget Responsibility now has growth at 1.2% this year and 1% in 2027, down from the 1.6% it previously expected. Fiscal headroom has also fallen from £23 billion to £15 billion, and every decision announced today was made in the shadow of that missing £8 billion.
It may yet get worse – forecasts are out of date the moment they are printed, and The Wall Street Journal reports that attacks could intensify once the U.S. midterms are out of the way. Healey said the government “did not want” this war, but Britain has lent its bases so it is involved – and now the bill is landing in bank accounts up and down the country. That is the uncomfortable truth at the heart of today’s budget – a conflict fought in the Gulf is being paid for by all of us.