Labour Figures Call Healey's Budget Approach 'Underpowered'
Senior Labour figures are privately uneasy about the Chancellor’s approach to his first Budget, with his conference speech criticised for offering little detail on policy or preparation for possible tax rises. One Labour MP complained that on tax and spending he had gone barely further than restating the fiscal rules. He is thought willing to accept a slimmer margin against them.
The market gave him an unusually vivid illustration today. The thirty-year gilt yield touched 6% this morning, its highest since 1998, before the global sell-off unwound and it finished back below that line at 5.94%; the ten-year ended at 5.39%, some twelve basis points off its high. So the headline number reversed, but the episode showed how little room there is between the fiscal rules and the bond market. There is a second awkwardness: Mr Healey resigned as defence secretary three months ago over the timing of the 3% of GDP commitment, and will now be asked when he intends to fund it. Treasury sources push back on the charge of detachment, pointing out that he was closely involved in the conference announcements, with forty officials working through the weekend on the triple lock changes. The Budget is on 28 October. Watch whether he pre-announces any revenue measure before then.