Last week, the Chancellor delivered the first budget of the new government. Whether people agree or not with its contents, one thing is clear: this was a distinctly “Labour” budget that marked a clear change of direction for our country.

Governments do not get to choose the economic circumstances they inherit, but they do decide what problems to address and who should pay for the costs of running the state.

Of course, not everyone will welcome every decision, but I believe the Chancellor played a difficult hand very well, managing to raise the revenue needed to repair the economy and invest in the NHS, all while ensuring those with the broadest shoulders carry the heaviest burden.

One of the first acts of the Tory-Lib Dem coalition government in 2011 was to increase VAT from 15% to 20% – a regressive tax that hit the poorest hardest. This was followed by cutting frontline police and primary school budgets, closing Sure Start Centres, neglecting NHS dentistry, and cutting Durham’s local government grant by 60%. We cannot just ignore the state this has left us in.

By contrast, despite a harsher economic inheritance than the Conservatives faced in 2010, with lower growth and higher national debt repayments, the Chancellor managed to keep her election promise not to increase VAT, income tax, or employee’s national insurance contributions, so working people can keep what they earn.

Of course, this meant needing to raise revenue elsewhere, including with higher taxes on business. I understand the well-rehearsed arguments against these decisions but point out that Britain will still have the lowest corporation tax rate in the G7, keeping us internationally competitive, while smaller businesses will be protected with a higher Employment Allowance and lower rates.

With so much of the media choosing to obsess over these tax decisions, much of the good news of the budget has been drowned out. I think that’s a shame because there are so many reasons to be cheerful:

Firstly, the budget gave Britain the pay rise it deserves. 3500 people in the Bishop Auckland constituency are on the minimum wage, which this budget just increased by £1400 a year for a full time worker. Public sector pay will also increase, which would not have happened under the Tories who have admitted that despite clapping for our keyworkers during lockdown, if they’d remained in government, they had no intention of honouring the recommendations of their own pay review board.

The budget also protected the triple lock on pensions, which will increase 4.1% in April – nearly 2.5 times higher than the 1.7% rate of inflation. This means the New State Pension will increase £470 per person next year. This is extremely costly and was not easy to deliver. It is worth remembering that as recently as 2022, the previous Conservative government suspended the triple lock for a year. If they had not done so, pensions would be up to £488 per year higher today.

Other measures to support people with the cost of living include freezing fuel duty;  providing £1 billion to extend the Household Support Fund and Discretionary Housing Payments; the biggest increase in the carers allowance weekly earnings limit since 1976, to allow people to work more hours before losing their entitlement; and a 50% increase in the roads maintenance budget so fewer cars are damaged by potholes.

Secondly, the budget addresses historic wrongs, committing £11.8b to the compensation scheme for victims of the infected blood scandal, and £1.8b to provide full and fair redress for victims of the Horizon IT scandal.

The government is also ending the historic injustice of the mineworkers’ pension scheme and returning over a billion pounds to 112,000 former coal miners, including over 6200 in County Durham, who will get a 30% increase in their pensions worth on average £1500 a year. I am particularly proud of this, because I fought for it, seconding the National Union of Mineworkers motion at Labour Party Conference in 2021.

Thirdly, the budget provided vital funds to begin fixing Britain’s public services. This includes an extra £25.6 billion over the next two years for the NHS, to cut waiting times; £1.3 billion increase to the core Schools Budget to raise stands in schools with 6,500 extra specialist teachers; £1 billion increase to Special Educational Needs and Disabilities (SEND) and Alternative Provision funding; and £1.8 billion to continue the expansion of government-funded childcare and help more parents stay in and return to work.

Finally, by fixing the economic foundations, cutting out wasteful spending, and investing in Britain’s people and infrastructure, I believe in the coming years people will look back on this budget as a turning point that began to deliver the change people voted for this summer.

Sam Rushworth.

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