Mutterings from Tory Old Guard
After Tory backbenchers gave a rousing reception to their new star Rishi Sunak, it was left to former Prime Minister Theresa May to remind the Tories what they used to stand for. When she was in office, she observed that there was no magic money tree. She was reflecting the Conservative tradition established by Margaret Thatcher in the 1980s and carried on by David Cameron in the last decade, when he claimed that austerity was necessary following the 2008 crash and Labour’s mismanagement of the economy. She may reflect unease that won’t express itself for now, that the sharp turn from austerity to bonanza may not end well.
It was truly extraordinary to hear the Chancellor saying he would spend “whatever it takes” to deal with the virus crisis. Of course, the seriousness of Covid-19 means that the government will do just that, but it was said in the context of a two-pronged budget which also promised billions of pounds of spending to level up the economy.
The Tories winning card up to now has always been that they manage the economy better than Labour. They may continue to do so but we have seen a very significant change in British politics since Boris Johnson took over as Prime Minister. The Conservative Party has ditched ideology to match the pragmatism of those voters in the North who were prepared to reject Labour for a gamble on the Tories. They will point to a strong economy, the Brexit dividend and the fact that cheap borrowing rates look to be permanent.
Jeremy Corbyn was heard in silence in the Commons when he replied to the Chancellor. This may have been because the new parliament is on its best behaviour. The truth is more likely to have been that Tories regard the Opposition as so irrelevant that it not worth booing them. On the Labour benches morale is low. 20 points behind the Tories in the opinion polls and with the discredited Corbyn still in place, there was little to cheer. The party’s claim that the years of austerity did great harm and have left the NHS ill prepared for the virus crisis have merit, but their ex supporters in the North aren’t listening. They just hope Johnsonomics will work.
Budget of two halves
The government are handling the virus crisis well. In policy terms, they are calm, vigilant and determined not to go over the top by closing schools and banning football until it is necessary. In the first part of the Budget, we got the economic measures to support this approach. Rishi Sunak announced £12bn of spending to protect business from the short term shocks the economy is facing. Providing the banks adopt a policy of forbearance, we must hope that good businesses don’t go under just because of cashflow problems.
The second half of the Budget had significant measures affecting the North. At last West Yorkshire is to get a devolution deal with a mayor. There is a £4.2bn transport fund for the elected mayors, although how devolved the powers to spend it will be is doubted by Labour leadership candidate Lisa Nandy. There is hope that Teesside, Humberside and Merseyside will benefit from spending on carbon capture centres.
We’ll need those because the government is schizophrenic on climate change. There were green measures but there was also the freeze in fuel duty and lots of new roads planned.
There were also gaping holes in the Budget. Hardly a mention of Brexit and the possible consequences of No Deal. A long-term solution to social care as far away as ever and the infrastructure plan deferred.
This may be Mr Sunak’s finest hour.