Opinion: Is Healey about to produce the Paddington Budget?

Finito World

At last, a Budget for Paddington. John Healey’s decision to remove import tariffs on marmalade will come as welcome news to Britain’s most celebrated Peruvian. For those of us whose household expenditure extends beyond the contents of a sandwich, the outlook remains less certain.

There is something almost touching about the announcement. Here is a government confronting the great, grinding problems of British life, from unaffordable housing to the cost of energy, and emerging from its deliberations with cheaper gherkins. Andy Burnham wants to do big things. His Chancellor has begun with a small preserve.

The promised household saving, combining these measures with earlier tariff suspensions, is up to £21 a year. That is about 40p a week. One should never sneer at a saving, particularly on behalf of people for whom every pound matters. But one might reasonably question the political wisdom of inviting a country to inspect its economic revival through a magnifying glass.

This is the danger of the Paddington Budget. Before Healey has even stood up, the government risks allowing its ambitions to be measured in teaspoons.

Some of the measures accompanying the marmalade deserve considerably more respect. Replacing the cliff edge in carer’s allowance with a taper addresses a genuine absurdity: people should not risk losing an entire allowance because their earnings cross a threshold. Extending paternity pay to self-employed fathers recognises that a baby’s needs do not depend on its father’s employment arrangements. These are meaningful changes.

Indeed, their seriousness makes the confectionery publicity stranger. Why package an important reform to carers’ working lives alongside throat pastilles? A government can make itself look smaller than the things it is actually doing.

But beneath the comic possibilities lies a more difficult question about taxation, compassion and who ultimately pays.

Governments understandably like to describe fiscal policy through its beneficiaries. Here is the family receiving help; here is the parent newly entitled to support. Such people are real, their difficulties deserve attention, and a civilised society should take them seriously. Yet the person financing the announcement is usually less visible.

That person may be an employer wondering whether another member of staff is affordable, a professional considering whether additional work is worth the return, or a small business owner whose rising turnover conceals diminishing rewards. None automatically deserves more sympathy than a carer. All belong in the same economic picture.

Nor are taxpayers and recipients separate populations. The self-employed father receiving paternity pay may spend the rest of the year struggling with his tax bill. The carer may also be an employee, a consumer and someone trying to build savings. Government divides people into categories for administrative convenience; their lives stubbornly overlap.

Compassion becomes intellectually lazy when it counts only what government hands over, overlooking what it takes, what compliance costs, and what its decisions discourage. A payment can be welcome while the wider settlement leaves its recipient feeling poorer, less secure or less able to get ahead.

The opposite laziness is to suppose that every tax cut pays for itself, or that worthwhile public provision can somehow be financed without anybody noticing. Serious government requires choices. It also requires an account of how the people making a greater contribution will retain the confidence and incentive to continue doing so.

This is where Burnham’s larger ambitions must eventually meet Healey’s arithmetic. A country cannot distribute prosperity indefinitely without attending to its creation. Nor will a collection of small concessions necessarily compensate for a broader sense that enterprise, effort and responsibility bring steadily diminishing returns.

The Budget may yet offer a convincing answer. Its advance notices are not the whole document, and judging it entirely by its marmalade would be premature. But ministers have chosen these notices. They cannot complain if the public notices their scale.

There is nothing wrong with making breakfast cheaper. There is something politically perilous about presenting that achievement to people wondering whether they can afford the house in which they eat it.

Paddington keeps a marmalade sandwich under his hat for emergencies. It is a sensible precaution. The question for Burnham is whether his government has anything else under its hat.