Polly Toynbee: This budget won’t ‘level up’ the country
A rapid response to Covid-19 was essential in Rishi Sunak’s first budget to staunch the threat to small businesses and workers bereft of work, facing the unknown. His “whatever it takes” for the NHS will be needed just to see that threadbare service through.
For the rest, look at the numbers and you might think this splurging Keynesian budget must be Labour-designed, surely? But look at how it’s spent and you know at once it’s true-blue Tory, a Boris Johnson crowd-pleaser, a popular drink-and-drive budget, running on miles of new roads.
“Levelling up”? Kick the tyres and there’s nothing that corrects the trajectory towards greater inequality. Things that sound egalitarian bear little inspection. Raise the minimum wage and cut national insurance contributions? Most goes to higher-earning households, while lower earners find most of the extra clawed back from their universal credit. If you want to help low earners, you add to the working allowance in universal credit. To stop more children sinking into poverty, predicted to rise to a 60-year high, you add to child allowances. As Torsten Bell of the Resolution Foundation shows, graphs of budget effects on the bottom 20% show at a glance which party is in power: relatively, incomes at the bottom always suffer under Tories, always gain under Labour.
Look north? Where people live matters less than how incomes are shared, when London has more people living below the poverty line per head than anywhere else. There’s no reform of regressive council tax in the budget: a top band two-bed semi in Blackpool worth £130,000 pays £1,624, while a £67.5m nine-bed mansion in Mayfair pays just £1,508. Without digging into these deep inequalities, there is no levelling up.
Is this the end of austerity for public services? They have at least stopped worsening. The police, NHS and schools get the headlines, but beyond a ringfenced bung for social care, councils get just 1% real increase after a 25% cut in the decade, says Professor Tony Travers of the LSE. They are the frontline for public health in this crisis, but bereft of any capacity to act.
Here’s the crux of the issue: Sunak echoes Johnson’s pretence that this is “the beginning of a new era”. But the Tories may struggle to wipe from the public memory those 10 years of slash-and-burn budgets they all voted for, when it will take years more for the public realm to recover.
• Polly Toynbee is a Guardian columnist
Katy Balls: Is Sunak a puppet of No 10? This budget should make people think twice
It was the new Toryism on steroids. Rishi Sunak delivered a budget that tore up the Treasury’s old rules on capital spending, provided a £30bn stimulus to fight coronavirus and a £100bn increase in public service spending by the end of this parliament: close your eyes and at times this could have been a budget delivered by a Labour chancellor rather than a Tory government in its 10th year.
Instead, it heralds a new approach for a Conservative party that has once again shape-shifted in a bid to keep up with the times. Sunak’s debut budget saw the chancellor pledge sums of money that would usually be classed as eye-watering by Tory standards. But the spending spree is not all that surprising.
Much of what was announced – from cuts to national insurance to funding for the NHS – was set out during the Tory election campaign. On top of this, Sunak unveiled an extensive package of measures to help businesses find a way through coronavirus turbulence and attempted to flesh out the government’s much-hyped level-up agenda. He went out of his way to pledge new funds for the metro mayors – with a special shout out for the West Midlands mayor Andy Street, as well as requests by Tees Valley mayor Ben Houchen for local projects met. With the local elections in May, the Tories are taking no chances when it comes to consolidating their new “blue wall” seats.
The most extraordinary thing about the budget was watching Tory MPs cheer as each spending pledge was announced. These MPs took to social media and WhatsApp to heap praise on Sunak for his smooth delivery and presence. One jokes that the big loser of the budget was Sajid Javid – who resigned last month over No 10 staffing issues. Since then, his allies have been keen to depict Sunak as a puppet of No 10.
However, this budget ought to have done enough to make people at least think twice. While Sunak did find money for Dominic Cummings’ pet Arpa research project, he also did a few things his way. For now, Sunak will stick with Javid’s fiscal rules that limit day-to-day borrowing – with a decision to review in the autumn. While Tory MPs are roundly impressed with a budget delivered against the most difficult of backdrops, some sense that there could be trouble along the way. It couldn’t exactly be described as a revenue-raising budget and it isn’t yet clear how the government intends to pay for the coronavirus package. If there are unpopular decisions to be taken, they will have to come later in the parliament – and closer to the next election. Sunak has passed his first test but his next test – the autumn budget – will be even harder.
• Katy Balls is the Spectator’s deputy political editor
Tom Kibasi: Even basic steps towards taxing the wealthiest were notably absent
In his first budget, Sunak delivered on the measly tax changes proposed in the forgettable Conservative election manifesto. The change to entrepreneurs’ relief is welcome, but far less significant than the moral outrage of the creation of a tax loophole so large it was visible from space in the first place. The novice chancellor eschewed the ambition of his hazard-prone predecessor and swerved away from a mooted “mansion tax” or straightforward wealth tax.
But the truth is that there is no sustainable end to austerity without asking those at the top to contribute more. The tax changes were only remarkable for the lack of ambition that they reveal: there was no serious attempt to tax the wealthiest in society. Even basic steps such as taxing income from wealth at the same rate as income from work – as it was under Nigel Lawson in the 1980s – were notably absent. The youthful and ambitious new chancellor shows no signs of upsetting the Tory base.
Once again, a Conservative government has claimed that austerity has come to an end without bothering to find the means to pay for higher levels of investment, thus revealing the moral bankruptcy of the project to slash the state. Indeed, the important increases in public investment (rising to the highest level since 1955) cannot compensate for the depleted stock of public assets as a result of 10 years of austerity, decades of underinvestment and the use of privatisation receipts to finance tax giveaways for the better-off.
If Sunak were serious about changing the economy, he would have had the courage to confront the vested interests that have profited as others have had misery inflicted upon them. The failure to find the political courage shows that Sunak belongs squarely in the tradition of his Tory predecessors. The gap between rhetoric and reality remains as yawning as that between rich and poor.
• Tom Kibasi is a writer and researcher on politics and economics
Miatta Fahnbulleh: We needed a climate budget but got a coronavirus one
The chancellor said he would do whatever it takes to respond to the Covid-19 outbreak, and has set aside a £5bn emergency package to help the NHS. The urgency this shows on coronavirus is welcome. The tragedy is that it doesn’t show the same urgency about an even bigger crisis in the making. The recent floods are a sobering reminder that climate change is here and it will have a devastating impact on people’s homes, livelihoods and communities. In the year that the government is hosting the 26th UN climate change conference of the parties (COP26), this should have been a climate budget. While more capital investment was welcome, not enough of this was directed at the infrastructure to get to a zero-carbon economy. We needed more investment directed into low-carbon public transport, home insulation, heating and reforestation. Instead we got £1bn new investment in green transport solutions and £1bn extra a year in flood defences. This pales in comparison to the £27bn investment in roads and the continued fuel-duty freeze – indicating the government still doesn’t get it.
Nor was there a clear plan for how we would help communities across the country manage the transition that must come in a way that is just and fair. If the government is serious about levelling up, it needs to take this head on. Of the 4m UK jobs in sectors that are most vulnerable to the transition, the highest densities are across councils in the north-west, Yorkshire and the Humber and the Midlands. The government needed to set out a plan for how it would direct resources and give powers to local areas to develop local industrial strategies. But there was no mention of this in the budget. We’ve seen what the government can do in an emergency. We need the same focus, commitment and investment in response to the climate emergency. Let’s hope the Treasury’s net-zero review later this year delivers.
• Miatta Fahnbulleh is chief executive of the New Economics Foundation
