UK budget: Boris Johnson loves the all-you-can-eat buffet

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If the British elections in December saw the Conservatives park their tanks on traditional Labor lawn, the government's first budget set out a vision of how this territory will be transformed with roads, houses, schools and public services conservatives.

It is such an interventionist project that it would have horrified previous Conservative administrations. But not only does it reflect the political mood of British Brexit, but it is firmly rooted in the realization that successive Conservative governments have been underinvesting for too long (creating some of the conditions that helped produce the vote on Brexit).

The headlines of the first British post-Brexit budget were linked to the control of the economic benefits of the coronavirus. Chancellor of the Exchequer Rishi Sunak has announced an investment of £ 30 billion ($ 38.5 billion) of stimulus packages, including 12 billion pounds of new money, to help protect businesses and individuals. Whether this turns out to be sufficient depends on the severity of the epidemic, the readiness of the National Health Service and the wisdom of the government's approach so far to avoid more drastic measures taken by Italy, Israel and China.

As I wrote on Monday, a large-scale disruption that threatens entire industries will result in a much larger bill.

And yet, let's assume for a moment that Sunak's provisions are adequate. At 39, he is not quite the youngest British chancellor (George Osborne got the job at 38), but he is perhaps the luckiest when it comes to the financial war chest which he inherited and in the low rate environment. Thanks in part to these years of austerity, he can invite the country to an all-you-can-eat buffet.

British Labor Party legislators could only stare, Sunak delivering the most expansionary budget Britain has seen it for a long time. There was a conservative chancellor who promised to spend "whatever was needed" at the NHS and stole Labor's clothes, calling his side "a party of public services". Here too, a curator wrote checks to the left and right: for new roads, schools and hospitals; for whiskey drinkers and wine swillers; for workers and doctors of the gig economy; for the homeless and those who live on benefits. And here is the traditional party of city bankers and wealthier southern counties leaning back to support the forgotten parts of the country that were once the heart of Labor.

Public investment has lagged across the UK, on ​​average only 1.4% of national income in the past four decades. Over the next five years, it will be 2.9%, which is more in line with what the Organization for Economic Cooperation and Development recommends, without breaking the mold. This is surely true, with research showing that increased public investment can help provide not only an immediate stimulus as builders get to work, but a sustained increase in growth.

Daily spending on public services will increase by 2.8% per year in real terms over the next three years, but remains at or below the growth of public service spending in the early 2000s (it reached 4.8% in 2004 under Tony Blair of Labor).

Of course, if it were as simple as moving your way to growth, governing would be easy. It all depends on the quality of the expenditure and how it is financed. Although Sunak has stated that his new measures will comply with the budgetary rules established by his predecessor Sajid Javid, I expect Javid rules to dilute. Current revenue and growth forecasts ignore the virus.

And the government will likely want to announce more spending later, perhaps in the fall budget. He did not address the problem of social care. Tackling the sorely underfunded services for the elderly and the chronically ill was a clear commitment and will require substantial investment. Wednesday's budget did little to achieve the 2050 net zero emissions target of the United Kingdom and does not address the country's lack of vocational training.

More flexible rules may be an acceptable price to pay, especially in this time of ultra-low interest rates. But it all depends on what the British get for all these expenses.

It is not yet clear. It is one thing to commit a massive increase in resources for infrastructure projects (Sunak has allocated more than £ 600 billion during the five-year parliamentary session), but another to find viable and ready-to-finance projects. As a former business secretary Vince Cable wrote for Bloomberg Opinion, megaprojects often go beyond budget and time.