Spring Budget 2024_GK Strategy
The GK team react to the Chancellor’s Spring Budget, with GK Strategic Advisers offering their insight into what this means for the Conservative Party in the run up to the General Election, what the budget means for individuals, as well as the announcement’s wider impact on key British industries.
To read our briefing please use the link above or click here.
GK Associate Hugo Tuckett reviews GK Strategy’s Private Equity Breakfast, where the Spring Budget and the general election were key discussion topics.
Will Jeremy Hunt use the Budget to put Labour on the back foot?
On Tuesday 27 February, GK Strategy was delighted to host professionals across private equity, corporate finance and wider deal advisory at a panel event to discuss what we can expect in politics over the next 12 months. The panel included The Rt Hon. David Laws, former Chief Secretary to the Treasury, and Chris Giles, Economics Commentator at The Financial Times. The discussion was chaired by GK’s CEO, Louise Allen.
A key theme of the discussion was the Government’s priorities for the upcoming Budget. The panellists agreed that challenges within the UK’s public finances would limit the Chancellor’s flexibility to implement wide-ranging tax cuts in the months leading up to the General Election.
Instead, they argued that the Government would prioritise smaller, targeted tax cuts that would create a dividing line with Labour. A reduction or phasing out of inheritance tax was touted as the one area where the main opposition party would struggle to match the Conservatives.
Labour’s immediate fiscal priorities, should it win the upcoming General Election, were also addressed by the panel. David Laws suggested that the Shadow Chancellor, Rachel Reeves, would have to decide whether to follow Gordon Brown’s approach post-1997 and commit to a Conservative government’s tight spending plans, or as was the case post-2010, label the previous administration financially irresponsible and introduce a series of tax rises and spending cuts to balance the books.
He later suggested that the Chancellor, Jeremy Hunt, might try to use the next few months to lay a series of traps for Labour, such as a commitment to reduce income tax in April 2025, in an attempt to create some separation between the two parties ahead of polling day.
Please get in touch via (hugo@gkstrategy.com) if you are interested in attending future events or would like to set up a call to discuss the year ahead in politics.
GK Associate, Joshua Owolabi, assesses Rishi Sunak and Keir Stramer’s recent struggles with rogue MPs.
Internal strife muddying the waters for both the Conservatives and Labour
Former Prime Minister, Harold Wilson, joked frequently about the frenetic pace at which politics could move. Over his long career, he became well-acquainted with the turbulence that intra-party politicking could bring. Keir Starmer and Rishi Sunak may be able to relate. Clearly, the last few weeks have been taxing for them both as they struggle to deal with internal conflicts.
There has been scant opportunity for Starmer to enjoy the emphatic byelection result in Wellingborough, where the Labour Party overturned a Conservative majority of over 18,000 votes. It doesn’t matter that only a fortnight ago Starmer led his party to its largest swing in a byelection since 1994. Since then, the Labour Party has needed to clamp down on grassroots dissent over the decision to withdraw support for its Rochdale byelection candidate, Azhar Ali. Days later, Starmer was scrambling to avoid a rebellion and the potential resignation of Shadow Ministers, after the SNP brought forward an opposition day motion on the war in Gaza.
The Prime Minister has been blindsided yet again by some of the more outspoken Tory MPs. Lee Anderson, who had been Deputy Chairman of the Conservative Party as recently as January, had the whip suspended following his incendiary remarks about the Mayor of London. Various Tory MPs have either defended or criticised Anderson since his outburst. Sunak has attempted to placate both sides, calling Anderson’s comments ‘wrong’ while also refusing to label them as ‘Islamophobic’.
However, Anderson doubling down on the comments has left Sunak with a problem to solve. Can he deal with the Anderson situation in a way that keeps the right-wing of his party happy, but also heeds the calls from ‘One Nation’ MPs for Anderson to be disciplined? Unfortunately for the Prime Minister, the answer to that question seems obvious.
Meanwhile. a speech from Sunak’s predecessor elicited the response “err… who is Liz Truss?” from a perplexed American audience at a conservative political conference in Maryland. Despite the criticism that Truss’ speech has received, Sunak will be concerned by her decision to lean into conspiracy theories about the ‘deep state’ and her call for Nigel Farage to rejoin the Party. Along with the Lee Anderson headlines, it highlights the way in which Sunak is struggling to control the narrative.
As Tory factions battle each other for control after the election and the Labour leadership works to limit self-inflicted wounds before it, the approaching Spring Budget hasn’t received much attention. Sunak, Starmer, Hunt and Reeves will need their MPs to get back on message as they set out their economic visions. They’ll be hoping that the infighting of February gives way to a renewed focus on policy in March.