We now know to expect extra spending on Manchester trams, the NHS, post-16 education, incentives for UK investment by overseas companies and even new cutters for Border Force…can there be anything left for tomorrow?
The answer is yes. For a start, 27 October is not just Budget Day, but also the date when the Office for Budget Responsibility (OBR) publishes its latest Economic and Fiscal Outlook and the Chancellor publishes a three-year Spending Review, which will take us beyond the next election.
Much of the pre-Budget releases are likely to include the parts of those documents which the government want to be heard and remembered. Those ‘leaks’ also have the benefit of a degree of spin – for example the emphasis on total spend rather than annual spend: £5 billion sounds much better than £1 billion a year for half a decade, half of which has been previously announced.
The good news is that the latest public sector finance data, published on Thursday, showed that in the first half of 2021/22 the Treasury had borrowed £43.4 billion less than the OBR had projected at the time of the March Budget, giving Mr Sunak some spending wiggle room.
The bad news is that the reduced borrowing still amounted to over £108 billion. Nevertheless, it looks unlikely that any major tax increases will be revealed this week. Mr Sunak has already introduced £42 billion of tax rises this year (corporation tax, NICs, dividend tax) which have yet to bite.
Where the Chancellor may take some tweaking tax action is around the topics sitting in his in-tray. For example:
As ever, the Budget’s most interesting content will be in the detail, not necessarily the headlines surrounding it