Things move on but they do they improve? In 1947 Labour chancellor Hugh Dalton resigned when details of his budget were leaked to the long-defunct Star newspaper. Gordon Brown refused to tell anyone, including PM Tony Blair, what was in his budgets.
No Dalton-like fate awaits Labour’s Rachel Reeves (above) although she will undoubtedly face a choppy immediate future unless she somehow persuades the public and the financial markets – who often see things differently – that the much-leaked pain in tomorrows UK Budget suits both parties.
For much of business this really wasn’t what they expected. Labour, like the Tories, hid much of what has now been revealed about the (alleged) dire state of UK finances and the need for yet more tax. Labour was supposed to usher in a reign of hands-off financial management that would allow the economy to step up its slow recovery from the battering it took from Covid, Brexit and the lingering effects of former chancellor George Osborne’s austerity regime.
Prime minister Keir Starmer’s various gloomy offerings have made Osborne-style austerity seem like profligate boom time. The result has been a pretty drastic collapse in consumer confidence, the factor which drives most upswings in the UK’s consumer-focussed economy.
For any CMO trying to persuade the board to boost marketing spend – and those agencies hoping against hope that they will succeed – the outlook is also much grimmer than they might have expected. The recent IPA Bellwether Survey was a screeching handbrake turn from the relative optimism of recent months and the most optimistic forecasts of adspend growth are still struggling to near two per cent, way below the historic average.
Does it matter what the Government says as opposed to what it does? Obviously we’ll have to see how financial markets react to the (much-flagged) rewriting of so-called financial rules to allow for more borrowing (for “investment” it seems, as opposed to paying the Government’s bills.)
Starmer’s government could hardly have got off to a worse start in terms of its messaging. What’s the point of continually telling us the NHS in broken (it’s still quite good at surgery) and then rewriting the rules to pour more billions into it?
Unless chancellor Reeves and her allies produce a pretty stunning package tomorrow (Wednesday October 30) the most adland, and the much-lauded creative industries as a whole, have to look forward to is more job cuts, with the dreaded AI doing the heavy lifting. Consumers, oddly enough, often take politicians at their word. Reeves had better have some choice ones in her fabled red briefcase.
