The story the budget has to tell

Labour need to let go of the narrative of how bad their inheritance was and start to offer one of realistic optimism.

I was quite excited by the King’s Speech and the story it gave Labour to talk about the country they wanted to build, rebuild and run. The speech was packed with goodies that people like me (nerds) had waited years for. But also set up really important ways to tell a story of British renewal in a multitude of areas. Areas that I care about, but also that the public care about when we stop talking about them like political nerds and start talking about them like passionate humans who became political nerds for a reason - to do just exactly this. To enact life changing, country changing policies on devolution, green energy, climate change and housebuilding.

Perhaps it was the size of the Kings Speech that was an issue. With so much to focus on, maybe it wasn’t possible to settle on a singular thread that ran through it all and told a simple story of renewal under Labour. Perhaps it was the internal issues within the Number Ten operation that made those comms impossible. Perhaps it was the determination to cleave to the Osbornite tactic of using the Summer to blame the last government (and so needing the story to be one of gloom). But whatever it was, Labour didn’t manage to use that historic set of bills to start to tell that story about itself. It seemed I was more enthused than the party itself when thinking and communicating about the government’s programme.

It is probably this underselling of the King’s Speech that has made this budget seem so all-consuming (I was going to say make or break, but despite the breathlessness of much of the commentary I don’t think that’s quite right. the fundamental truth is that the budget is the first of many that will come throughout the parliament). This budget has to do the work of setting the narrative of the government for key audiences which include the markets, voters and Labour members but probably does not include the Daily Mail or Telegraph. What it has to move away from is laying out the circumstances in which Labour finds itself. Yes, they are dire. But the question now is how we are going to make it better - not how bad it is.

The row about the definition of working people was probably avoidable, but is also slightly mischief making. The problem is that we know that many powerful and loud mischief makers exist. We should not hand our enemies weaponry and then be surprised when they turn it on us.

There is a difference between taxing owning things (be those physical things such as land and houses or amorphous things such as shares) and money earned through wages. This is a simple definition and the debate should have been this simple. But Labour’s slightly opaque language has left space for the nonsense debate about additional taxes on ‘working people’.

There is a debate between left and right on how those taxes are balanced. But the right are not being honest in how they want to have that debate at present because they know that it means defending an approach on taxation that is more popular - i.e. taxing assets and things purchased by a very few such as private education - so they deflect into discussions of ‘double taxation’ or the deeply inaccurate but highly emotive language of ‘death taxes’.

The truth - as we all know - is that we are all taxed in different ways all the time. When I go out to buy a household object - say a kettle or a toaster - I will pay VAT on it even though I am buying it with my wages which have already been subject to tax. Everybody knows this. Everybody understands this.

Equally, if a landlord is paying money on the income from owning or disposing of property outside of their own home this is (and should be) taxed differently from a pay check they may or may not get from other work. That too is widely understood and appreciated. And it is utterly cowardly for big landlords to try and hide behind the image of a granny letting out her house as she moves into an easier to manage flat when they fight this tax. If they believe the ownership of property is an unalloyed good that should not be taxed - they should make that argument. But they can’t so they don’t. Hence this nonsense about who is a ‘working person’ and who isn’t. it’s an easier fight for them to have. Labour shouldn’t have handed that to them - but they should be equally unafraid to make the case above.

Ultimately, if Labour do what is being discussed we will not see taxes go up in our pay packets. If our wages don’t rise - that will be a decision by our employers to pass on their tax rises but it will not have the same instinctual impact as literally taking home less than you did a month before. So I don’t think this is going to have the kind of immediate impact with the voters that many commentators are squealing about.

This is a first budget and will almost certainly be the hardest. There will be tax rises and they will have an impact overall - both positive on public services and negatively to some extent on investment. The balance of those will be what matters and this is where Reeves will need to focus her story.

The public sort of knew the state of the public finances and definitely knew and cared about the state of public services. Improving education and the NHS will be essential to whether this budget is judged a success or not in the medium to long term - i.e. at the next election. Decisions made far down a pipeline that does not show up in wage slips less so, frankly.

But that will mean starting the story of that improvement this week. And not just on the lovely big shiny projects on which new borrowing will be (rightly) be spent. I spoke to a primary school headteacher recently who told me she was having to cut two posts to plug an £80k deficit. That will be felt by the pupils and parents at her school and it will be these day-to-day austerity issues that will have to be turned around by Labour.

Labour has had a summer of gloom. Now, as the days grow shorter, we need a winter not of discontent, but of optimism. We need to hear a story every day about the things Labour is doing not simply to raise growth figures but what that growth will mean in practices for all of us.

A Labour government focused on growing the economy is good. But it is in what they plan to do with that growth that will differentiate them from a Tory government. Growth is an amorphous concept. GPD even more so. Yes, we can have a generalised sense that things could be ‘turning a page’ - but we also need to hear about what the next four years are going to feel like. How things will - in fact - get better. Not on a macro-economic level. But for us. For our neighbours. For the communities and voters who elected Labour (and those who did not).

Budgets are fiscal events. Budget narratives, though, have to be related to the lives we lead and the things we care about. Labour shouldn’t be derailed by the nonsense coinfected over the ‘who is a working person?’ row. But it should learn a lesson in plain and direct speaking to the people it must most care about - the people who live and work and thrive and survive in Britian. They need to be given a narrative of deliverable hope this week so they can both start to believe that things will get better and then see that promised delivered on.

If that happens, little of the conversation of the last couple of weeks will matter. Though it may yet have an impact. Because if Labour can show that the Tory press (and I include the Times in this) has overshot its rhetoric and increase the gap between the reality and the scaremongering, they have a chance to grow bolder in their response to the papers who endlessly cry wolf. Now that would be a strong position to fight for a next term from.

This is the fortnightly free version of my weekly email. I rely, in part, on the income I get from my writing, so I would be delighted if you sign up to get the whole shebang!

The price of this newsletter is now £5 per month or £50 for an annual subscription. You can subscribe by clicking below. Paid subscribers get double the content - access to everything I write on a weekly, rather than fortnightly, basis.

Your support for independent media is greatly appreciated. This project takes work and care, and I cherish your support and recognition.

However, if this option is not possible for you and you want to thank me for this post) you can also make a one-off donation by clicking below.