The Broad Picture
After the blustering boosterism of the Prime Minister in Manchester the other week, next Wednesday we will have a more polished, serious performance by the Chancellor.
Rishi Sunak is widely seen as the PM in waiting and is already positioning himself in contrast to the seat of the pants approach of the current incumbent of Number Ten.
In the Budget and Spending Review, Sunak will remind the nation that bills have to be paid for, and his own MPs that one day they will get their low tax, small state party back again.
The Chancellor is also likely to take a different approach to business in his Budget speech. Bosses are feeling bewildered by the hostility of the government when they have pointed out the shortage of labour and the spiralling costs of energy. Suck it up and pay more wages seems to have been the Prime Minister’s advice. Sunak is likely to embrace business as the partners of government, particularly on delivering the green agenda.
A lot of policy announcements that could have been in the Budget have already been announced. The Health and Care Levy, National Insurance and Corporation tax increases and the Green Plan.
What will be of most interest is Sunak’s comments on the possible economic storm that could hit us this winter. For instance, what is going to happen to inflation. With the soaring price of petrol and gas, it wasn’t surprising that the Governor of the Bank of England recently seemed to depart from his policy of maintaining historically low base rate.
But any move by the Governor to increase interest rates would have a dramatic effect on government debt servicing not to mention people’s mortgages. The Chancellor will point out that quantitative easing is about to end. Also, the ending of the Universal Credit uplift. Both could dampen spending, not to mention the possible effects of another upsurge in Covid.
I wrote earlier that I expect Sunak to be more emollient to business and we may see limited measures to help. Research and development tax reliefs might be increased following a review and a successor scheme to Kickstart and apprentice grants may be announced. However, business rate reform looks as far away as ever. It is scandalous for a government with a 78-seat majority not to have the guts to tackle this thorny issue.
Alongside the Budget we are due to get the spending review for the next three years. Money for the NHS always gets a cheer but support for local government and the justice system, less so. And yet our councils are desperate for cash having played a vital role in combating the pandemic. Meanwhile court delays mean justice delayed is justice denied for so many victims
SIR DAVID AMESS
Our thoughts should be with all MPs, councillors; indeed, many other frontline staff who face this uncertain world on a daily basis.
Could the keyboard warriors give it a rest? Their vile words may be just that to most of them, but a few are then set on a very dark path indeed towards undermining our democracy.