I had little doubt that Rushi Sunak's first budget would be a disaster, and it was.
It was a budget in two halves. There was the coronavirus budget, and then the rest. I'll deal with the issues in that order. I stress, this is being written before I can read all the details.
Coronavirus
There were numerous problems.
First, there was almost no help for big business. The assumption is that they are robust. That assumes this crisis is very short term. I do not share that view.
Second, loans apart I think the small business support was £7 billion. There are 5 million businesses in the U.K. That, then is £1,400 each. That will not go far.
True, the cancellation of business rates will help some businesses, I agree, but unless government compensates local government it will impoverish their services.
And £3,000 of grant per very small business is interesting but a) how long will it take to get it b) how much will it cost to get it and c) is it taxable? I suspect this just a token gesture, in other words.
The offer to cover statutory sick pay for small business was not a gesture, but let's be clear that £97 a week does not cover people's costs and the recompense is for 14 days - and anyone who is ill or who has multiple children who might be will be off for much longer than that.
Heaven help those who gave rent to pay. Their plight was ignored.
On coronavirus my conclusion is simple: this was sticking plaster economics with lots of very small gestures that are going to do little to save hundreds of thousands of small businesses and millions of employees from hardship and even insolvency.
The rest
The rest of the budget was as bad as that for coronavirus. There appeared to have been almost no attempt to join these two issues together. So growth was going to be down, but only a very little despite worldwide recession being likely. And despite that the current budget was going to balance every year of this parliament.
I will be candid and say that this is simply fantasy economics. This is not going to happen. The government is going to run major deficits; debt is going to grow as a proportion of GDP despite claims to the contrary and growth is going to disappear for a while. Sunak failed to recognise any of that. He literally spoke about a world that does not exist and an economy that will be nothing like the one he predicts. His whole career will, forever, be blighted by this complete failure.
Worse, he ignored the climate crisis, almost entirely: what he said was greenwash.
And on social issues - like delivering the real transformation for ordinary people who do not want to spend their whole lives sitting in their cars on new roads - there was nothing at all. In that sense, this was a pure neoliberal, running away from the problem unless it concerns big business, budget. He even got in a dig at migrants, who will have to pay more for the NHS.
At its core then this was a Tory budget, but one even more removed from reality and more laden with meaningless gestures than most.
Expect the unravelling to start very soon.
Postscript
It is now clear coronavirus support in total is £12 billion, so my figure per small business of £1,400 looks fair.
And there will be £30 billion of new borrowing for investment - but supposedly not current spending. Both assume growth. Neither is in the slightest realistic.
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It was quite strange, almost as if he had to graft something about coronavirus onto the front of a speech that had already been prepared, but without bothering to smooth over the join. From the smiles behind him, it looked as though he was acting as Boris’s mouthpiece at times.
With colleagues, we were waiting for some substantial tax changes – APR, BPR, pensions – which never came. Apart from the ER change, which puts things largely back where they were in 2008. (£1m gain at 20% is nice enough, but £1m gain at 10%? Thank you very much indeed!)
I have been asked to recorded on the tax impacts of the budget tomorrow
Of course their is off payroll working and other such stuff
But for the rest? Nothing. Tax is the forgotten dimension to fiscal and social policy if we take this budget as indication of what is to come
Not even any consultations that I can recall being announced on critical issues that need addressing
What else can we expect from government composed led by, and made up of, people of such low quality?
And then there’s this from The Guardian just now:
“Chris Grayling and other senior Brexiter Conservatives are set to be appointed to the powerful intelligence and security committee, who will then have the final say over whether to release the long delayed report on Russian infiltration.”
Of course we can trust these people to be honest and release the report in full, even if it shows Russian interference in the referendum, can’t we?
Just as we can trust this government to approach the Coronavirus quesiotn correctly, and deal with the impending climate disaster as well.
The steady undermining of democracy continues
Critically, the chancellor increased the tapered allowance threshold for pensions tax relief to £200,000 – that should solve all the problems associated with a decade of austerity and mis-allocation of resources.
or not
Your sarcasm is noted!
Sunak is an excellent orator and came across well i thought. So much of it could have featured as Labour Party policy. A big change over recent Governments… Johnson is having a real run at “one nation toryism” to keep the northern working class vote
If that could be represented as Labour policy then Labour would have seriously lost the plot
Labour have lost the plot in the eyes of the electorate at least, Tories polling 50%..the leadership debate has become a joke with no one taking much notice..i fear for my party i really do
@ phil mills: ‘Sunak is an excellent orator and came across well i thought.’
I didn’t watch or listen to it but John Crace doesn’t appear to agree with you: ‘It’s always the politicians with the least charm and charisma who feel obliged to go on the longest.’ (https://www.theguardian.com/politics/2020/mar/11/rishis-wholesale-spaffing-sends-tories-into-raptures).
I’ll settle for his version of the event. And Richard’s critical analysis of its content.
All in all a thoroughly depressing day 🙁
Sunak showed himself to be a third rate orator, or. He tried top turn it into pantomime, literally. Lowest common denominator stuff
As ever, your opinion appears to be at odds with the general consensus!
Thank goodness for that
Really? So you enjoyed the “get it done” pantomime?
The fact that many BBC commentators and newspaper opinion pieces are all spinning it could have been a Labour party budget when John MacDonald has quite explicitly shown how inadequate this budget was merely further reduces the BBC’s standing.
‘Nearly threw our radio out the window today – my better half still has Radio 4 on – if I hear one more arsehole banging on about getting the country into more debt just because we are spending a bit of money I’m sure I’ll end up looking like one of those characters in the film ‘Scanners’.
BTW – I get the impression more and more that the Tories are out to kill us frankly. They want to cull us – I’m quite sure of it so that people like Sunak can have Yorkshire all to himself in that rather big house he lives in.
Now, what was it that Peter MangletheLabourpartyson said ‘We are intensely relaxed about people getting rich’ or something…………..yes, a little bit too relaxed eh Pete? Those who got rich want more – they always want more so they then got rich enough get Labour are of the way.
New Labour – what a bunch of suckers.