Budget: Rishi Sunak and Boris Johnson’s power struggle begins here – Tom Richmond

THE empty green benches that greeted Rishi Sunak on Budget day were emblematic of the Covid pandemic’s enduring impact on the economy.

Unprecedented for such occasions, and a symbolic sign of the times, they were a complete contrast to the packed benches of a year ago when a fresh-faced Chancellor unveiled his first Budget.

At least the well-groomed Richmond MP didn’t have to squeeze between Boris Johnson and other close colleagues – social distancing spared him that traditional moment of awkwardness.

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But the physical two-metre divide could, in time, come to symbolise a metaphorical political gulf between the Chancellor and Prime Minister. After all, it’s not just the economy that has been turned on its head as short-term support schemes like furlough are extended a year after their launch until the vaccine rollout is complete – jabs today and jobs tomorrow being the new mantra.

Chancellor Rishi Sunak leaves 11 Downing Street to deliver his Budget,

The same is true of politics. The Tories, the traditional party of low tax, are now committed to future rises in corporation tax while the freezing of personal tax allowances until at least April 2026 will hit family finances.

Contrast this with Labour – the party prepared to tax low earners to fund Jeremy Corbyn’s 2019 fantasy election manifesto is now queasy over business tax hikes. It appears opposition for Opposition’s sake.

And then the discernible difference – it’s not yet a fault-line – between Sunak and Johnson over when to turn off the spending taps and begin to pay off the Covid costs so the UK is less susceptible to future interest rate hikes.

Despite a desire to be “honest” with the people over tax, and his Budget presentation was both strong and sober, the Chancellor has bought time – the furlough job retention scheme will remain until September, albeit in an abridged form, when Johnson hopes it will be ‘‘business as normal’’ from June.

The surreal Budget scene in a socially distanced House of Commons as Rishi Sunak announces his measures.

Sunak also knows this – he appears, to have been uncomfortable at some of the PM’s ad hoc spending commitments and the Richmond MP told The Yorkshire Post that he regularly seeks the counsel of his constituency predecessor William Hague.

Now Lord Hague of Richmond, the fact that the eminent former Foreign Secretary – and Tory leader – warned, in one of the most significant Budget interventions, that people who oppose some form of increases to personal and business taxes are buying “into dangerous illusions”.

They are strong words for a Tory party who admired Hague for so long. The cost of Covid is £407bn and borrowing is at its highest level since the war. But they ignore the short-termism now so endemic in partisan politics – the Archbishop of York alluded to this as he called for a new post-pandemic political and societal vision – and the fact that one of the most influential policy-makers is now Marcus Rashford, a footballer with a social conscience and Twitter account who can mobilise public opinion, rather than any great Parliamentarian.

All this will add to the already tricky calculations being Downing Street’s neighbours as the 2024 election nears – a more cautious Chancellor with an eye on the top job versus a Prime Minister who redefines ‘‘populism’’.

Relations between Boris Johnson and Rishi Sunak will be critical to the country's future.

As such, another Budget ritual – the instant verdict on whether the speech is a success or not – needs to be deferred until after the lifting of the lockdown, and phasing out of support schemes, has finished.

Even issues like the ‘‘temporary’’ £20 a week Universal Credit uplift, now extended until September, are fraught and go to the heart of the post-pandemic conflict between politics and economics.

But while Sunak’s smooth delivery and ‘‘Brand Rishi’’ do reassure many, the Chancellor’s myriad policy wheezes did not mask the absence of a 10-year education and skills plan. No policy prospectus for the Northern Powerhouse is complete without an acceptance that this region’s schools have suffered decades of under-investment – one
reason why performance here lags behind more prosperous areas while too many children sees their prospects scarred by poverty.

Tackle this and the North will become a greater global force rather than a region left exasperated by the lame excuses of, among others, Education Secretary Gavin Williamson who said feebly this week that “we recognise that there is a broad impact on so many young people”.

Lame words which explain why so many families here believe that education has become a policy after-thought in this pandemic. The one definitive lesson from Rishi Sunak’s Budget is that the Chancellor should take full ownership of the schools and skills agenda.

This is our future – politically, economically and socially – and Mr Sunak cannot leave it to chance, or the dynamics of his relations with Boris Johnson, if the recovery proves harder to reconcile than the original Covid rescue mission.

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