With Westminster abuzz following revelations of the first UK politician to contract coronavirus, coupled with a declining global economic outlook and continued uncertainty over the trajectory of future post-Brexit trade talks, there can have been few Budget statements delivered in recent years set against such a turbulent political and economic backdrop.
That Chancellor Rishi Sunak’s debut budget statement should be delivered with such confidence, authority and aplomb should not have come as any great surprise to those who have followed his meteoric political rise – not least following his star-turn during last year’s General Election debates where he ably substituted for Boris Johnson on more than one occasion.
With both the public and politicians seemingly gripped by panic, this was a reassuring performance from a Chancellor less than a month in office who was at pains to emphasise that the UK would prevail through this short-term challenge.
In total, the Chancellor pledged £30 billion in coronavirus-related spending to support businesses and employees through the coming weeks. His package of support included scrapping business rates for small and medium businesses and extending statutory sick pay for employees (including benefits for the self-employed and the gig economy).
In presenting his budget, the Chancellor also navigated a delicate political tight-rope between the traditional, small-state, low-tax wing of the Conservative party, and those newly elected Conservative MPs from traditionally Labour-leaning, northern constituencies. It was apparent that Sunak’s approach to the Budget was influenced by balancing the competing demands of the Tories’ new post-Brexit governing coalition and to avoid unduly antagonizing either wing of the party.
It explains, in part, why he ducked the opportunity to eliminate entrepreneur’s relief altogether, following an almighty backlash from the right of his party. It also explains that contrary to some of the pre-budget speculation, he avoided picking a fight with his newly elected backbench MPs by freezing fuel duty for yet another year.
But where intra-party divisions persist, Conservative backbenchers were in unison as a new Tory catchphrase was deployed ad nauseum by the Chancellor. Much to the chagrin of the Labour benches, the Chancellor was roared on by colleagues as he proclaimed the Conservatives to be the “real workers’ party” with record levels of investment in infrastructure, including £5billion towards gigabit-capable broadband and £27billion for roads as part of the Government’s mission to “level-up” economic opportunity and prosperity across the country.
For all the pre-budget talk of dampening expectations, this was a statement not short on aspiration and a Chancellor determined to repay the trust placed in the Conservative Party by its new electoral coalition.
Nevertheless, as with previous Budgets, the devil is so often in the detail. As politicians and journalists forensically examine the Chancellor’s red book over the next 48 hours, the Government may yet come unstuck as question marks linger over how policies will be funded, the sustainability of the public finances and the OBR’s revised economic forecasts.
But for today, Rishi “Rich” was able to splash the cash!
By Tomos Davies, Director (Public Affairs) and Former Conservative Special Adviser