Red box a-blazin’, Chancellor Rishi Sunak held his biggest gig of the year this week. He was all smiles and optimism in his Budget, almost as if the whole thing was a sponsored ad for the latest rose-tinted spectacles.
The Budget is the Chancellor’s annual statement on the Government’s spending plans for the year ahead. For a Chancellor as plainly ambitious as our dear Rishi, it is also the perfect opportunity to look like a future prime minister.
But it seems that Sunak is picking up bad habits from his political arch-nemesis, Boris Johnson, who recently declared that his policy on cake is “pro-having and pro-eating it”.
Sunak announced that he would balance the books, the traditional preserve of the vote-hungry Conservative Party, by increasing public spending by 3 percent over the next three years and cutting taxes.
Wait, what? Yes, you read that correctly. Sunak plans to pay off our enormous debt by removing his means of doing just that – spending cuts and tax rises.
Of course, the UK economy is now expected to grow by 6.5 percent this year rather than the previous forecast of 4 percent. Borrowing is also set to fall from almost 8 percent to 3.3 percent of GDP next year, but that doesn’t justify the Chancellor’s economic gymnastics.
For once, Labour’s usual jeremiad against the Government didn’t sound weak and cheap. Rachel Reeves, the Shadow Chancellor, accused Sunak of living in a “parallel universe”. She has a point.
So this Budget is really a cling-film-concealed attempt to win votes before the next election, expected as early as 2023. Just listen to this catalogue of promises: a 50 percent reduction in business rates (tax on business properties) from 2022-2023, a 6.6 percent increase in the National Living Wage, an 8 percent reduction in the planned cut to Universal Credit, and no increases in taxes on fuel and alcohol.
While students are likely cheering at the freeze on alcohol duty, hold your horses because the new approach is to tax alcohol based on its strength. (Odd that, especially for a supposedly small-state Chancellor.) Stronger wines, beers, ciders and spirits will all become more expensive. Looks like you’ll soon have to fork out more for your weekend Buckfast.
With a few cake crumbs left on the plate, we’re all left wondering how on Earth the Chancellor will deliver on so many contradictions. We might still be wondering that by the next election.
Luke Brown hosts ‘The Pound in Your Pocket’, a weekly business and finance news briefing podcast for students which is available on Spotify and Google Podcasts.
