Brussels Notebook: Out of control debt is a huge problem for the Chancellor

With the budget looming plans are likely to face substantial change from what next week brings.

As things stand it looks as though that will be another smack in the mouth for anyone hoping for evidence of a change in direction to put growth ahead of welfare spending in the government’s thinking. In advance of the budget lobby groups have been in top gear making the case for what they want from the chancellor.

This includes the farming lobby, but for it and others there is a sense the calls are being made more in hope than in any expectation of a positive outcome.

This is not necessarily the fault of the Chancellor, John Healey, who seems more impressive than his predecessor, Rachel Reeves.

His problem is that he is facing massive odds against him.

Figures showing the UK economy delivering some growth are more a mirage than reality, in that any growth in percentage terms is from a low base; it is little comfort that few in Europe are doing much better, with the exception of Ireland gaining from a budget surplus built on tax receipts from global tech companies. The big problem for Healey is that government debt is out of control. We are in the position of someone borrowing on a credit card to meet the interest payments on another credit card.

This is not a problem of the present government’s making; it has been getting worse and no government has been willing to do anything about it over the past fifty years.

Making matters worse for the chancellor is that he, as a former defence minister, needs to find significant funds for defence; he is also struggling with the impact of wars in Ukraine and Iran, with the latter driving inflation and no willingness on the part of Donald Trump to find ways to end a war he began with no plan for what the outcome should be.

Even a humbling in the November US elections will not blunt his expectation that the rest of the world and American consumers must pay for his refusal to find an exit strategy. For farmers the budget bring up memories of the shock when Reeves imposed changes to Inheritance Tax.

This remains as wrong a decision now as it was then. The minor changes secured were insufficient to change the impact this is having on farm families and the future for UK food production.

The farming lobby has been making its case again for change. But the budget is more likely to be about finding ways to raise revenues rather than correcting a muddle-headed decision by a chancellor who never understood the implications on her decision.

It achieved nothing in revenue raising and did nothing to impede the super-rich using agricultural land as a protection against tax.

It was a financial failure and an even greater failure on delivering social justice to give families priority over tax avoiders.

That however is now water under the bridge and it seems the industry is stuck with the Reeves thinking, even if she is long gone from the job. The UFU put out figures this week showing the collapse in investment across all parts of the industry and all enterprises.

There are various reasons for this, but the main blame has to lie with government policies.

Agriculture, like much of the rest of UK industry, lacks the confidence to invest in an economy with very uncertain prospects. Under this government, industry has been a soft touch for revenue raising.

This is to avoid the challenge of tackling the welfare bill, where there is a case to trim wasted money without undermining those in genuine need. This is not being helped in agriculture by a lack of any political sympathy at Westminster or indeed at Stormont.

Politicians’ obsession with green issues over food production and the lack of any incentive to invest for future generations to inherit explains that stall in investment on farms.

Sadly, rather than fixing this the signs are that the budget is more likely to deliver another Tyson-style smack in the mouth, rather than a viable plan for an industry capable of boosting the ailing UK economy.