Kuenssberg: The Budget cannot mask big changes to our economy

In normal times (remember?), this weekend is going to be a blast about next week’s budget.

If you’re feeling a little muted so far, it’s not because the media is going crazy for something else (what is it?). A calming manager with years of thoughtful banking experience sorted things out after the crazy young guns used up all the loot.

Given how he got the job and has a political character, he won’t wake up Wednesday morning and throw out a red box full of shocks to the unsuspecting public. .

A senior Conservative MP expects some “pleasant surprises”, but points out that Downing Street’s neighbors’ priority is “to maintain a reputation for being cautious and cautious”.

Expect headlines that the country’s deficit is lower than expected, potential pension savings giveaways, and a few goodies to help working families whose childcare costs are skyrocketing.Faisal’s primer here. You can read it at

But this Sunday, when we sit down on our program with Jeremy Hunt and Labour’s Rachel Reeves (who hopes to fill his job), talk about what happens on Wednesday. There are more than the details of

No single budget can hide some big changes in how the economy works. Long-term changes in wealth and wages are reflected in how we all vote.

Statistics from the last few days show that the economy is not as dire as predicted a few months ago, but what has happened over the past few years and what may come next doesn’t look too good. is not.

Frankly, the economy has failed to grow convincingly for a long time, and we won’t see a big boom anytime soon. In fact, the Bank of England believes growth will also be modest over the next few years, only returning to pre-Covid levels in 2026.

Politicians have no shortage of explanations for what went wrong. Some are self-inflicted, others are out of control.

There was the Ukrainian war, the pandemic, and Brexit chaos. We’ve also seen years of political strife, the dire market reaction to Liz’s truss decisions, the impact of spending restraints in the 2010s, and even the long-lasting aftereffects of his 2008 financial crisis. Remember back then when pundits brandished an “L-shaped” chart and warned that it would take years for the economy to bounce back to good health?

These political and economic dramas have a real impact on what politicians many years ago presented to voters as the usual achievable aspirations: the hope that each generation will do better than the one before it. It posed a big challenge to expectations. Maybe it’s unstable now.

For example, look at statistics from the Institute for Fiscal Studies. In 1997, more than 60% of his 25- to 35-year-old middle class owned a home. Twenty years later, that number had dropped to just over 20% of his.

Think about it. This is a big change. Of course, there are blizzards in the stats, and every year there are ups and downs with every budget. Kwasi at the Red Box at 11 Downing Street Just think how impactful his Kwarten’s short time was.

But let’s look at the big changes that have been made over a longer period of time.

For years, wages have slumped and grown more slowly than wealth. Economist and IFS director Paul Johnson says a “significant portion” of people in their 20s and 30s earn less than their parents at the same stage of life.

Buying a house is harder. If you can’t buy it, it’s more expensive to rent. For decades, what your parents inherited has become less important to your chances of prosperity.

Labor leader Sir Kiel Sturmer has been given ammunition under the Conservatives to suggest the ‘social contract’ with the public to get back what they put in is frayed.

The “hardworking families” — a nebulous group so beloved by successive generations of politicians whose votes could fluctuate if only the right solutions were hanging in front of them — worked harder and It is likely that life will also become more difficult.

To this can be added the pressure of an aging population. Fewer people pay taxes and live happier and longer, but they need more cash for their health and care.

The two major political parties share a desire for strong economic growth. This is not an abstract story. For example, if the economy doesn’t grow and the government needs more money for health and defense, ministers will have to borrow money, raise taxes, or cut spending. These are not ideas that parties like to put on the front of their leaflets, lecterns, or Facebook ads.

The problem for the Conservative Party is that even within the party, opinions are divided on how to do that. Former Prime Minister Liz Truss’ verdict was to cut taxes and borrow for it, but it ended in disaster.

Jeremy Hunt and Rishi Sunak promised drastic tax cuts when they were vying to become Tory leader, but both say now isn’t the right time. There will be promises of tax cuts, but it is unlikely that we will bow to backbench pressure to cut taxes right now.

Hear more from Rachel Reeves on Sunday’s show about how Labor is spending billions of dollars to create thousands of jobs and grow by supporting green industries. Perhaps there are tensions, pledging to monitor every penny while promising large-scale state intervention in the industry.

Rishi Sunak has soothed nervous Tory eyebrows over the past few weeks, citing frenzied activity, fewer leaks from the Cabinet, and that the economy may not be in the dire situation previously thought. is shown. His subdued prime minister, Jeremy Hunt, reassured manic financial markets when he took over. Reeves has carefully built a reputation for reliability and business alignment.

What happens to our wallets makes a big difference to what happens at the ballot box. There is a lot of pressure.

It’s not just about what happens this Wednesday, it’s about who wins the bigger debate that will affect us all in the months and years to come.

We’ll be asking Hunt and Reeves these key questions in the morning, and we’ll also talk a little bit about what’s going on at the BBC.