The poor Labour party. If the job of opposition is to oppose, how to oppose Rishi Sunak’s budget?
The truth is that had Sunak’s speech been drafted for Gordon Brown, not many would have batted an eyelid. Spending was replaced with investment; tax cuts a promise, not a reality.
There was much to like from a business perspective, and from a City perspective. The bank surcharge slashed, new visas for scale-ups, the annual investment allowance maintained at £1m.
The Chancellor will have gone to bed last evening happy with his work, delivering a political masterpiece that didn’t so much park the Tories’ tanks on Labour’s lawn but set up headquarters.
But even he, surely, has one number squarely on his mind: 1.3 per cent.
That’s the UK’s forecasted GDP growth in just three years’ time. Even that paltry figure relies on some heroic increases in productivity and inflation returning to benign levels far faster than many economists think is likely.
Britain cannot afford the size of the state envisioned by this new version of the Tory party without sustainable, high, economic growth. That’s true even now, with historically low interest rates, and will only become more obvious if interest rates as expected start to creep up – pushing up the cost of servicing our now £2 trillion-plus debt.
Nor is it going to be made easier by an ageing population and the pressures that places on the NHS, which is already consuming nearly half of all state spending.
No wonder the Chancellor lowered the price of a pint. When you look at the figures, the assumptions, and imagine what state we’re in if anything – anything – blows these optimistic forecasts off- course… well, it’s enough to drive you to drink.