Trevor Phillips asked a cabinet minister point-blank if the Budget was a mistake this morning.
Labour’s fiscal event in October saw chancellor Rachel Reeves increase taxes by £40bn – including an increase in the employers’ rate of National Insurance – in a bid to fill the £22bn black hole the government claim the Tories left in the public finances and to bolster public services.
Despite the government’s pledges to put growth at the heart of its plan for the country, inflation rose to 2.6% in the 12 months to November and the value of the pound has fallen.
Sky News presenter Phillips also told science secretary Peter Kyle that “business is unimpressed” with the UK’s performance in an interview this morning.
Phillips asked: “Was the Budget a mistake?”
Kyle said the Budget enabled him to unveil a “radical reform” of digital infrastructure.
So Phillips asked again: “Were the tax rises a mistake, as most business organisations are telling you?”
Kyle repeated his answer, adding: “We always said we couldn’t fix the country in six months. After an election, you don’t go back to zero. You don’t start from a clean sheet, you start from where the predecessors left off.
“They [the Tories] left us with a broken economy, public services on their knees and international relations in tatters. We have fixed the foundations and now we are building on them.”
Phillips cut in: “That’s the fourth time you’ve told me that in this interview.”
“Well it’s about the fourth time you’ve asked me!” Kyle insisted.
But Phillips pointed out: “After six months of your government, we are at the bottom of the table in the G7 for growth.”
Pointing to a graph showing the UK’s lacklustre growth rates compared to the rest of he G7, the presenter noted: “You’re not even going to get a hearing [from businesses and investors] if you don’t confront this.”
“That’s the reality that the markets are looking at,” Phillips added.
“That’s the reality that we inherited six months ago,” the minister replied.
“No that’s your reality now. That’s your reality after tax rises,” Phillips hit back.
Kyle said: “That’s the reality we’ve had for 14 years – highest tax for 80 years, lowest growth. We’ve been stuck in that vice, we are trying to break it.”
The minister also defended Labour’s sky-high government borrowing costs, saying: “What’s happening in this country is very in line with what we’re seeing in like-minded countries.”
He appeared to back up Reeves’ previous claim that there would be no more tax rises, too, telling Phillips: “When the chancellor speaks, she speaks for the government.”
Trevor Phillips, “Was Rachel Reeve’s budget a mistake?”
Peter Kyle, “Because of the budget.. We are unveiling a radical reform of the way our country is structured.. We will build the foundations of the digital infrastructure going forward”
Trevor Phillips, “Were the tax rises… pic.twitter.com/neDDFbOEaK
— Farrukh (@implausibleblog) January 12, 2025
