Here's my tests for John Healey’s Budget: cut spending, fund defence and rule out tax rises

A few weeks ago, I wrote that if Britain’s economy were a car, every warning light on the dashboard would be flashing.

Since then, the economic news has only got worse. Borrowing has come in billions above forecast, the Chancellor’s headroom has reportedly more than halved since March, and one serious voice after another has lined up to warn him that he is in serious trouble.

Now the situation is akin to the police standing in the road, waving their arms, and trying to flag the car down before the tyres come off and it drives over a cliff. The Governor of the Bank of England has warned that fiscal plans must be “credible”.

Andy Haldane, who has advised Andy Burnham, says the private sector feels “taxed out” and wants the Government to “take the knife to public spending”. Jim O’Neill who used to advise the government has told Healey not to “do any harm” with tax rises. It appears John Healey has rolled up the windows, turned up the radio, and kept driving.

His first Budget is in just over a fortnight, so I have set him five tests, an MOT if you like. They are also a roadmap which if followed, would keep both driver and passengers safe.

First, stop maxing out the nation’s credit card.

Labour is borrowing far more than the plan it inherited, and the Budget must bring the deficit down rather than add to it.

When Britain is paying the highest interest rates for government borrowing for 28 years – far higher even than during the quickly reversed Liz Truss era – its time to stop binge spending.

Second, properly fund defence. When he resigned as Defence Secretary in June, Healey wrote that 3 per cent of GDP by 2030 was “what Britain must set”. Now he holds the purse strings, he has absolutely no excuse not to fund our forces. This is not something that can be kicked down the road yet again.

Third, act on the youth jobs emergency. Three quarters of a million young people are out of work which is a disgrace. As leading businesses such as Marks & Spencers or John Lewis have said, cutting the jobs tax for under 25s and repealing Labour’s damaging (Un)Employment Rights Act would help businesses start to hire again.

Fourth, no new taxes. Rachel Reeves’s first two Budgets raised taxes by £66 billion a year and put the tax burden on course for the highest level ever recorded. The British public are taxed enough already so no one wants to see any new taxes, no higher rates and no new stealth taxes slipped into the small print.

Fifth, cut the welfare bill which means finally facing down the backbenchers and union paymasters Labour has always been too frightened to take on. The increase in non-pension age welfare spend reaches £50 billion per year over this Parliament. Its out-of-control and affordable.

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Only this way, can we sure up the economy and start the journey to making Britain more prosperous again.

The Conservatives have set out more than £70billion of savings, around half of it from welfare, to cut the deficit and cut taxes. That pays for abolishing stamp duty on family homes, scrapping the family farm and family business taxes and halving the jobs tax for young people. In my first week as Shadow Chancellor I found the money for three per cent on defence, because as a former finance director I know every promise has to be paid for.

John Healey still has time to pull over. If he drives on regardless, it won’t be him paying for the repairs, it will be every family and business in Britain.

Please write at least 4 paragraphs

Please write at least 4 paragraphs