What was behind Rishi Sunak's mini Budget?

By Chris Mason
Political editor, BBC News

  • Published
Media caption,
BBC Political Editor Chris Mason asks the chancellor why he uses “energy profits levy" phrase - and not say windfall tax.

This was a mini Budget, in all but name.

Why? Because budgets are about taxes. And there was a big new one of those.

Budgets are about spending. And there was an even bigger amount of that.

And sometimes they're about borrowing. There was that too.

If you allowed yourself to think just for a moment that there might have been a bit of cheap politicking going on with it all being set out just after all those bumpy headlines about wines and fines, parties and pizza, well, yes, there was an element of news management going on.

When I met the Chancellor Rishi Sunak, in the click and collect zone of a DIY shop in Watford in Hertfordshire - he was there to do a question and answer session with staff - he told me "categorically" the package of measures had not been rushed out to bump all those Partygate headlines off the front pages.

And let's be clear, in money terms there was nothing cheap about this intervention. This was significant and this was expensive.

So much so that it has some Conservatives non-plussed and uncomfortable. One called it "tripe," another "red meat for socialists".

Tory sceptics see this as un-Conservative.

Windfall

A big spending, big taxing chancellor by any modern standards was saying he would do more of both, with a big dollop of extra borrowing on the side too.

Opposition parties have been calling for a windfall tax on the oil and gas companies for yonks.

For weeks, Conservative ministers have been falling over themselves to say it was a bad idea - and even today having introduced one, Rishi Sunak couldn't quite bring himself to call a tax on a windfall a windfall tax.

Instead, he insisted to me, it was an "Energy Profits Levy."

It was, though, he argued, "pragmatic," given the scale of the challenge so many people are facing at the moment with prices shooting up - and it helps pay for the measures he announced.

Most of the rest of the cost is being paid for by borrowing, which is then added to the national debt. And the interest payments on that debt are rising as interest rates go up.

Brutal truth

A couple of other things are worth a mention: In our interview, Mr Sunak acknowledged that what he is doing will contribute to pushing up prices.

Because some of the help is universal, some of the people who get it might not really need it - and that could be inflationary, nudging up prices.

In other words, this could add to the very problem he is attempting to remedy. But, Mr Sunak insisted, the inflationary impact would be "minimal."

The opposition parties can - and are - claiming that the government is tin-eared and slow and should have done all this sooner.

The challenge they all now face, the perennial challenge for opposition parties who get their ideas nicked, is working out what they say next, having had their big plan lifted.

There are no easy answers for them, or for ministers here.

Because the brutal truth is this intervention won't make anyone feel better off. Just a little less worse off.