A budget that supports Boris Johnsons

If there is a political message that Boris Johnson has hammered since he became Prime Minister, it is that this is a new government. It should in no way be confused with another recent Conservative government in which almost all of its leaders were very happy to serve. The Boris Johnson, Michael Gove and Rishi Sunak who have held ministerial positions in the past five years? You've never seen them and they were three other types.

In the space of an hour, Mr. Sunak, the chancellor – and a man previously considered a true tax hawk – has buried a decade of conservative austerity, outdistancing his government as surely as he He had spent the last five years in opposition. Sometimes the Conservatives' capacity for reinvention is truly breathtaking.

It was a very accomplished budget, but not what we would have traditionally considered very conservative. He did what Mr. Johnson said he would do in last year's election and was in fact the work of a "Brexity Hezza". However, it is a budget that leaves a lot of difficult decisions in the waiting bin.

When it comes to performance art, Mr. Sunak has been extremely impressive, even if he has sometimes succumbed too much to the sloganite that Downing Street demands of his ministers. All lingering doubts about the decision to dispense with Mr. Sunak's predecessor will be resolved. In place of Sajid Javid's lead speech, a light and polite speech. It is too early to speak seriously about the next leaders, but he has shown himself a force to be reckoned with.

This budget had two components: the immediate coronavirus crisis and the longer-term project to stabilize and revitalize the British economy. On the first, Mr. Sunak was particularly effective. In truth, he cannot know how much havoc the crisis will cause to his longer term plans. But his commitment to do "whatever it takes" to support the economy, workers and businesses was convincing. Promises of unlimited resources for the National Health Service, temporary support measures (whether these are loan or professional leave programs) and promises to finance the statutory indemnity sickness for people unable to work were the insurance sought by citizens. Sickness benefits in the UK are still low by some standards, but, with the Bank of England's synchronized measures, Mr Sunak has reason to believe that he has done enough, for the benefit of him. # 39; instant. More direct demand stimuli may be needed later, but this £ 12 billion package has impressed with its seriousness. It also shows the extent of the government's fear of the crisis.

Given what we can't yet know about the economic stunt of the coronavirus, much of the rest should be viewed more as a signal of intent. But this intention is perfectly clear. Pledges from the last election on health, homelessness, further education, reduced national insurance and investments in road and rail must be kept as promised, but not through taxation. More regional funding and plans to move 22,000 civil servants to the north have offered more evidence of a look that extends beyond London. The large sums of money spent on science and research match the vision of Dominic Cummings, Mr Johnson's chief strategist, of innovation that propels the future prosperity of the United Kingdom.

With borrowing rates at historic lows, this is entirely reasonable. Few doubt the need to rebuild the services and communities created by austerity, but the sums are enormous. Public spending will increase by 2.8% per year, an increase of £ 50 billion by 2024/25 (not counting coronavirus species), while borrowing will increase by £ 27 billion in 23/24. Mr. Sunak may have promised only to revise his fiscal rules, but it will be a surprise if they don't relax. The party of balanced budgets? It was also other guys.

The cameras didn't shoot for Keir Starmer, probably the next opposition leader, during the speech, but it must have been a sobering experience for Labor. Mr. Sunak's priorities show that the Conservatives will not take their new working class voters lightly.

That said, this budget also dodged many difficult decisions. We are no further ahead in plans to reduce the cost of social care. If there are contentious tax changes to come (for a pension tax relief for example), there is no sign of it.

There was also no sign of a willingness to bite the bullet on green taxes. Sunak again froze fuel duties and exempted many people from ending the diesel subsidy. There have been green measures, but for a country that apparently intends to be zero carbon net by 2050, this government's environmentalism is a bit shy.

In the short term, we cannot therefore criticize the politics of this budget. In the longer term, however, it will face certain economic realities. Which brings us to Brexit. It would be unfair to say that Mr. Sunak did not discuss the signing policy of this government, but references were few. He did not mention, for example, the forecast of the Office of Budget Responsibility 5.2% hit long-term gross domestic product. There was no recognition of the additional cost to business or the economy which so many of his colleagues seem so jaded about. Between the coronavirus and Brexit, the economy faces two direct challenges, but for the moment ministers recognize only the immediate risk. Even so, the former may offer him the cover for the loosening that might be required by the latter.

For now, that was the budget demanded by the time and by Mr. Johnson's new interventionist, the conservatism of a nation, with the significant caveat that the coronavirus allows. Sunak presented a budget that supports government intuitions. But that doesn't allow many of them to be wrong.

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