Yet what we saw a week ago was not a Budget for a new age. Rather, we saw only a temporary shifting of the goalposts and short-term fixes and virtue signalling that do not come close to solving the long-term issues facing this country.
The pure amount of spending makes it not unreasonable to brand Sunak a hypocrite. Early in his speech he spoke of budget responsibility and discipline. He then proceeded to outline a return to increased spending on overseas aid, nationwide pay rises and £44bn in funding for the NHS – a spending black hole is an undeniably low-standard deliverer of healthcare relative to our European rivals.
We need to stop looking at the NHS as a religion and instead as a service provider; were it any other provider, we would not throw money at it, we would undertake wholesale reforms to ensure our money produces better results.
While a 50 per cent discount on business rates is something thousands of business owners up and down the country will be thrilled with, the caveat here is what immediately preceded this discount – “one year”. Sunak says he is backing businesses, but he clearly doesn’t trust their potential enough to truly let them loose by permanently eliminating the current rates.
Alas, we have the most un-Conservative Conservative government we have ever seen, and tax seems to be its go-to source of finance.
On tax generally, this was Sunak’s opportunity to use the new freedoms of Brexit to cut corporation and personal taxes in order to go for super growth and, in so doing, achieve greater tax receipts. Instead, he has chosen a doom loop of tax and spend.
On infrastructure, the Chancellor promised, among other figures, £46bn for investment in railways. This would not have been necessary had the Government not already wasted so much on an HS2 project that now appears dead in the water. This money must be spent on improving regional connectivity which can boost enterprise.
The promises relating to innovation, domestic R&D tax reliefs and money for skills boot camps are welcomed. These are positive steps towards ensuring that when more of our children enter the workplace, they will have the skills for wealth generation across the UK.
The goal of this Budget – to level up the nation and reinvigorate growth – is a laudable one. However, what the Chancellor has promised simply will not cut it.
The return to existing levels of regulation and taxes will stifle future growth opportunities, and if the Government’s main method of wealth creation is simply to fund pay rises and more welfare, sustainably achieving a high-wage economy without bankrupting ourselves appears highly unlikely.
Deregulation and regulatory divergence would free up enterprise and make the UK supremely attractive to entrepreneurs, creating an enterprise- friendly environment in which the winners pick themselves. This will then naturally increase wages, as businesses are able boost productivity and to offer more to their staff.
Forcing businesses to pay more overnight, especially in the leisure and hospitality sectors, could leave many either unable to pay their staff or force businesses to cut staff levels; in other words, a surefire way of ensuring boom quickly becomes bust.
Our high-spending Prime Minister now has an equally high-spending Chancellor to fund his bold agenda. In a post-Covid world, Sunak had a unique, post-Brexit opportunity to set out a plan for super growth, but instead seems to be reverting back to the mistakes made in the 1940s – investing in welfare: the NHS, net zero and aid, rather than investing in economic growth and wealth creation.
Unless he sees the error of his ways, the net result of this will eventually be a repeat of the 1970s: debt, inflation, unemployment. The chickens will come home to roost.
John Longworth is chairman of the Independent Business Network and a former Brexit Party and Conservative MEP.
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