Have you ever watched a new manager step into a struggling team and immediately reach for the exact same playbook that got the previous coach sacked? That is the uneasy feeling many of us are getting right now as John Healey settles into the role of Chancellor. The country handed him a rare chance for a clean start, yet the early signals look uncomfortably familiar.
A Familiar Script in a New Pair of Hands
When a fresh prime minister arrives and the previous chancellor departs, the expectation is usually a burst of decisive moves. History offers plenty of examples. Significant chancellors of the past few decades understood that the first weeks in office represent the highest political capital they will ever hold. They used it. Independence for the central bank, dramatic cuts to top tax rates, the creation of independent fiscal watchdogs – these were not cautious adjustments. They were statements of intent that shaped the economy for years.
John Healey has so far chosen a quieter path. A few well-worn remarks about supermarket pricing, some carefully leaked talk of additional borrowing, and then silence. The major announcements are being saved for an autumn Budget. That approach is understandable on paper. In practice it risks looking like continuity rather than change at a moment when change is badly needed.
The Window for Bold Action Is Already Narrowing
Political time is not infinite. With a general election possibly only two years away, the clock is already ticking. Growth needs to accelerate, wage increases need to outpace inflation in a sustainable way, and unemployment needs to move firmly downward. None of those outcomes arrive overnight. They require early decisions that shift incentives and expectations.
I have watched enough economic cycles to know that waiting for the perfect moment often means missing the only moment that matters. The current chancellor appears content to inherit the previous framework rather than rewrite it. That decision carries consequences that will not stay confined to Westminster.
What a More Ambitious Opening Could Have Looked Like
Imagine the first month had been used differently. Licensing new North Sea fields and easing the windfall tax on fresh developments would have sent an immediate signal about energy security. Suspending the planned rise in employers’ national insurance for half a year would have given firms breathing room to hire. Removing lingering post-EU tariffs and pausing certain green levies that compound already high industrial energy costs would have offered tangible relief to manufacturers and households alike.
Even a modest recalibration of the pension triple lock into a more sustainable double lock would have demonstrated seriousness about long-term welfare spending. None of these steps would have solved every problem. Each would have shown that the new team understood the difference between managing decline and attempting to reverse it.
Instead we hear familiar complaints about business pricing power and repeated efforts to adjust fiscal numbers so that higher borrowing appears more acceptable. The underlying assumption seems to be that additional public spending will somehow unlock growth. The evidence for that belief remains thin.
The Real Cost of Sticking to the Old Approach
Persistent inflation is not primarily the result of greedy retailers. Major supermarket chains operate on some of the tightest margins in the commercial world. Constant public criticism of those businesses does little to expand supply or improve efficiency. It does, however, chip away at the confidence needed for investment.
Meanwhile genuine supply-side measures stay on the shelf. Planning rules that make housebuilding and infrastructure painfully slow remain largely untouched. Data protection rules inherited from the previous European framework continue to impose costs that many smaller firms struggle to absorb. Incentives that would encourage entrepreneurs to expand or relocate capital into productive activity have not yet appeared.
I keep returning to a simple observation. Economies respond to clear signals. When the signal is more of the same – higher taxes later, more borrowing now, and a hope that growth will materialise – businesses and households adjust their behaviour accordingly. They become more cautious. Hiring slows. Investment decisions get postponed. That caution then becomes the very constraint the government claims it is trying to overcome.
The most expensive policy is often the one that looks safest in the short term yet leaves the underlying problems untouched.
Lessons From Earlier Turning Points
Look back at the chancellors who actually shifted the trajectory. One granted operational independence to the central bank within days of taking office. Another cut the top rate of tax by a third and watched the economy respond. A third created an independent body to police the public finances and set out multi-year spending control. Agreement with those specific policies is not required. Recognition of their scale is.
Each of those moves carried political risk. Each also communicated that the new team intended to govern differently. The current approach communicates the opposite. Continuity has its place, especially when institutions are functioning well. When growth has been weak for years and living costs remain elevated, continuity can start to look like complacency.
Perhaps the most telling detail is how little discussion there has been about the supply side of the economy. Demand-side measures – more spending, more borrowing – dominate the conversation. Yet without easier planning, lower energy costs for industry, and clearer incentives for private investment, additional demand simply bids up existing capacity. That is how you get inflation without the growth.
The Political Arithmetic Is Unforgiving
Two years is not a long time in economic terms. Structural reforms take longer than that to show their full effect. If the next Budget delivers only marginal adjustments wrapped in carefully managed language about fiscal responsibility, the window for meaningful improvement will have narrowed further.
Voters notice when their own financial position fails to improve. They notice when energy bills stay high, when house prices remain out of reach, and when good jobs feel scarce. Promises of future recovery lose credibility when the early months produce no visible change of direction.
In my view the greater risk is not that the chancellor moves too quickly. It is that he moves too slowly and then discovers that the political capital required for harder decisions has already evaporated. By the time the next election approaches, the narrative will have hardened around the idea that the government simply managed the status quo rather than attempted to transform it.
Where Practical Progress Could Still Begin
Even at this stage a clearer set of priorities remains available. Energy policy could prioritise domestic production and affordability over symbolic gestures. Employment costs could be reviewed with an eye to the firms that create the majority of new jobs. Regulatory burdens that serve little practical purpose could be pared back without sacrificing genuine standards.
Welfare spending deserves the same scrutiny. Protecting the incomes of older citizens is a legitimate goal. Doing so through mechanisms that grow faster than the economy can sustain is not. A measured adjustment now would be far less painful than a forced correction later.
None of these ideas are radical in the abstract. They become radical only when the alternative is continued drift. The question is whether the current leadership is prepared to treat them as urgent rather than optional.
Confidence Matters More Than Rhetoric
Businesses invest when they believe the rules will remain stable and that effort will be rewarded. Households spend and save when they trust that their real incomes will rise over time. Both groups currently appear to be waiting for clearer signals. The longer the wait continues, the more cautious they become.
Repeated criticism of private sector pricing does little to restore that confidence. Adjusting statistical definitions to create more fiscal headroom does even less. What would help is a coherent story about how the government intends to expand the productive capacity of the economy rather than simply redistribute existing output.
I have found that the most effective economic messages are usually the simplest. Make it easier to build. Make it cheaper to employ. Make it more attractive to invest. Everything else is secondary. The current approach still seems to treat those three objectives as afterthoughts rather than foundations.
The Danger of Assuming Recovery Will Arrive on Its Own
There is a quiet assumption running through much of the recent commentary that the economy will eventually recover as long as public spending remains elevated. History offers limited support for that view. Periods of strong growth have more often followed periods of credible reform than periods of expanded state activity alone.
When the private sector is burdened by high energy costs, complex regulation, and uncertainty about future tax rates, additional public spending tends to crowd out rather than crowd in. The result is higher debt, higher interest costs, and little improvement in living standards. That cycle is already visible. Extending it for another two years would be a costly choice.
Perhaps the most interesting aspect is how little debate there has been about the opportunity cost. Every month spent defending the existing framework is a month not spent building a better one. The political incentives currently favour caution. The economic incentives favour urgency. Those two forces are pulling in opposite directions.
What Success Would Actually Require
A successful chancellorship in the current environment would look different from the one we have seen so far. It would begin with a clear diagnosis: weak growth is not primarily a demand problem. It is a supply and incentive problem. Solutions would therefore focus on removing obstacles rather than adding temporary stimulus.
That means faster planning decisions, more predictable energy policy, simpler employment rules for smaller firms, and a welfare system that protects the vulnerable without creating open-ended fiscal commitments. It also means resisting the temptation to use the tax system primarily as a tool of redistribution when the more pressing need is to expand the total size of the pie.
None of this requires abandoning social goals. It requires sequencing them correctly. Growth first creates the resources for better public services later. Attempting the reverse has been tried repeatedly and has rarely delivered lasting improvement.
- Prioritise domestic energy production and lower industrial costs
- Review employment taxes that discourage hiring
- Simplify planning rules that slow housing and infrastructure
- Recalibrate long-term welfare commitments to match economic capacity
- Signal clearly that productive investment will be rewarded rather than penalised
These are not revolutionary ideas. They are practical responses to visible constraints. The fact that they remain largely unaddressed is itself revealing.
Time Is Not on the Side of Delay
Every chancellor eventually faces the same realisation. The early months offer the greatest freedom of manoeuvre. Later months bring accumulating constraints – political, fiscal, and electoral. Choosing to conserve that freedom rather than use it is a choice with consequences.
John Healey still has time to change course. The Budget later this year could still contain genuine reforms rather than carefully managed continuity. Whether it does will tell us a great deal about the government’s true priorities.
For now the pattern looks familiar. Familiar patterns produce familiar results. In an economy that has already endured years of weak growth and elevated living costs, that is not a reassuring prospect.
The real test will not be the eloquence of the speeches or the creativity of the fiscal arithmetic. It will be whether ordinary households begin to feel that the economic ground is shifting in their favour. On current evidence that shift still feels some distance away.
A Final Observation on Political Courage
Governing is hard. Changing direction while in office is harder still. Yet the alternative – managing an economy that continues to underperform while insisting that more of the same will eventually work – is harder in the long run. The costs simply arrive later and fall on a wider group of people.
I remain of the view that the country would respond positively to a clearer break with the recent past. Higher growth is not an abstract statistical goal. It is the difference between rising real wages and stagnant ones, between expanding opportunity and rationing it, between a public sector that can afford its commitments and one that cannot.
The tools exist. The political space, though narrowing, has not yet closed. What remains uncertain is whether the will to use both is present. The coming months will provide the answer. Until then the most honest assessment is that the early signs point toward repetition rather than renewal. And repetition, in the current economic climate, is a risk the country can ill afford.
