The Budget came and went last week almost quietly. This is what the Prime Minister and the Chancellor wanted, indeed needed. It has come to something when a Conservative government’s chief ambition for a budget is not to cause a stock-market crash, but that is what it has come to. It is the approach of Rishi Sunak and Jeremy Hunt personally to their jobs that provides the credibility to keep the markets calm. This they did well.
Two interesting things to note did emerge very clearly from the Chancellor’s statement. Firstly, both main parties agree that government should tax us more and spend more of our money on the things they think we like and need. The suggestions that government should spend less, do fewer things and that we should all pay less tax and be allowed to keep more of our own money to spend in ways we choose is very much out of fashion at Westminster. These things go in cycles but at some point some bright spark will (re)discover thinking in this area, but not yet and probably only after some huge financial crisis forces us to. Like last time.
Secondly, there is agreement that some doctors are now so rich and their pension pots so large that they need to be given a special tax cut to persuade them to keep on working. The only difference between the Chancellor and his shadow, Rachel Reeves, is that he thinks this special treatment should be extended to all of us. The Shadow Chancellor thinks only doctors should enjoy this special taxpayer subsidised perk. It is narrow ground on which to pick a fight but that is where they have both chosen to stand their ground.
The Budget however was overshadowed by the collapse of the Silicon Valley Bank. President Biden ensured it was bailed out in the US. The UK bit of the bank was bought by HSBC in a very smooth deal overseen by the Prime Minister, Chancellor and their officials. Indeed so smooth was their management of the issue that it is possible many people hardly noticed the failure of a bank of which most of us had never heard, unless of course you watch the stock-market where share price falls reflected a growing sense of nervousness. This nervousness has only increased this last weekend as we watch what is going on with Credit Suisse. Spring may be on its way but there are chill winds blowing through the corridors of Whitehall power at the possibility of another banking crisis.
It is, though, the corridors of Westminster where most eyes will be fixed this week. The former Prime Minister, Boris Johnson, is due for a good grilling in front of a senior committee of his fellow Parliamentarians about his conduct in office. The former Premier we are told has been working hard with his legal team, his aides have been briefing the newspapers. Boris, we read, has been spending hours practising his lines for the grand inquisition. As always to do with things Boris an enormous amount of heat is being generated, whether any illumination materialises we will have to wait and see, but as everything to do with him is it will be well worth watching. (Wednesday, 2pm. Live.)
While Sunak successfully steadies the Conservative Party and Keir Starmer keeps a steady hand on the tiller of the Labour Party it is in Edinburgh we see the crumbling of a once mighty political edifice. Truth be told no political system thrives when one party stays in office too long. No political party stays healthy, energetic and attentive to the electorate if it just goes on unchallenged and this, now, is what the SNP is suffering from, from being too long effectively challenged and holding office. When you stop and think about it, what organisation, business, let alone a political party should ever permit two people who are married to one another to hold the top two positions in the organisation as Nicola Sturgeon and her husband, Peter Murrell, have done. It is obviously not wise, but such lack of wisdom often comes when a politician is in office too long. It is not the SNP’s fault that they keep winning elections of course. That is the failure of the Conservative, Labour and Liberal Parties to offer compelling alternatives. Sorting out these failures ought to be a priority for these parties’ national leaders. Doing what is needed to recover in Scotland would do the Conservative and Labour parties in particular a power of good nationally. As it is, SNP fatigue is likely to see an improvement in Labour’s share of the Scottish vote. The SNP’s vulnerability however ought to be seen as a huge opportunity for Conservative strategists. The Red Wall focus is a political cul-de-sac for the Conservatives, who need to focus on a broad national appeal and move away from a regionalised focus.
It is the banks, however, that will dominate this week. Politicians know the public appetite for another round of bank bailouts is pretty low. If the bankers cannot learn to run their banks without regularly crashing them into the ground then some huge and comprehensive overhaul of how they do their business will be necessary. It is going to be a long week at Westminster and in the City as everyone nervously waits to see if we are going to tumble into another banking crisis.
