Spring Statement needs to bring calm to Britain's cycle of chaos, says ALEX BRUMMER
The build-up to next Tuesday’s Spring Statement reminds me of the football chant ‘Shall we sing a song for you?’ often heard from visiting supporters at Chelsea’s Stamford Bridge stadium.Since Labour arrived in office in July 2024, the build-up to any fiscal event by Chancellor Rachel Reeves has been accompanied by frenzied speculation, and endless, unsettling trial balloons, followed by hyperactivity.November’s late Budget logged 88 tax-and-spend changes, and cast a shadow of uncertainty over confidence and growth, which stymied business investment and consumer confidence.In my City soundings this week, there has been a collective sigh of relief that Britain can look forward to a much-needed period of financial inactivity.Forecasts from the Office for Budget Responsibility will be revised to reflect changes since the Budget.The Institute for Fiscal Studies suggests a fall in migration could lead to £10billion more borrowing over the medium term, offset partly by higher-than-forecast tax revenues from inflation and surging real wages. Unpredictable: Rachel Reeves’ reign as Chancellor has been a nightmare for commerce, consumers and savers, writes Alex BrummerAn urgent need for more defence funding, as Russia’s brutal war in Ukraine marks a sombre fourth anniversary, must be recognised.There also have been under-the-radar spending commitments, notably an extra £3.5billion for education.How this will be squared with the cost of fiscal U-turns will wait until the autumn. Reeves’ reign has been a nightmare for commerce, consumers and savers.To-ing and fro-ing on pension savings, ending with a hammer blow to salary sacrifice, has been particularly destructive.Britain’s constant fiscal fiddling and the ritual with which Budgets are presented is at variance with most of the G7.Government budgets are the starting point for decisions, not holy writ as in Britain. In its annual inspection of the UK economy, the International Monetary Fund was clear that one fiscal event a year, rather than several mid-course corrections, should bring some calm and order to policy-making.Reeves will respond to forecasts on Tuesday. No red box photocalls outside Downing Street are planned.Latest surveys from the S&P purchasing managers’ index show green shoots and the economy is due a cyclical bounce.Let calmness begin.Low spiritsEven ‘Drastic’ Dave Lewis could not be expected to come up with a turnaround strategy for Johnnie Walker and Guinness purveyor Diageo in less than two months.The sales forecast for 2026 is feeble and the dividend slashed. Real action is yet to come. From Lewis’s words it is possible to divine direction.Positioning Diageo as a luxury company – the initiative by the late, great Ivan Menezes – looks to be over. We should be prepared for disposals.Lewis will instead focus on more competitive prices for popular booze such as Smirnoff and Captain Morgan.Johnnie Walker, which still outperforms almost everything else, won’t need the cut-price treatment.If Tesco is any guide, Lewis is not afraid to axe geographies more distant from the core at the right price. China, where sales have plummeted, could be for the chop.Investors might be reassured by his conclusion that social change, in the shape of less drinking by young people and obesity drugs, is not quite the threat portrayed.> Drastic Dave strikes: Diageo shares sink as it slashes dividendFlat liningYet another blow to former boss Sharon White’s legacy at John Lewis. Chairman Jason Tarry has decided housebuilding, embraced when Bank Rate was 0.1 per cent, is no longer the future.Planning permission for up to 1,000 homes, on top of stores in London and Reading, is already in place.But it won’t be the partners wielding the steel and concrete. A management partnership with Aberdeen will be dissolved.London is moribund, with just 3,200 homes started last year, and apartments are plunging in price.The cost to Lewis and Waitrose of withdrawal is put in the low tens-of-millions. That would have been better used in stores and on more competitive pricing.The project should have been jettisoned long ago.> John Lewis axes ill-fated build-to-rent housing planDIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
