Rishi Sunak Budget declares war on pandemic
Was this a historic budget? The UK government, yesterday, announced ambitious economic plans. Billions and billions will be spent across the country to fight Covid-19 and fund the future.
Coronavirus. Economic stagnation. Looming trade talks.
This is a time of crisis for the UK. But the Conservatives have taken that as an opportunity to rip up their own rule book.
Gone are the days of public service cuts. Instead, this Budget was all about spending in order to “level-up” the country.
Whatever it was, the new chancellor, Rishi Sunak, emphatically promised to “get it done”.
Few expected such a free-spending Budget. Personal finance expert Martin Lewis described the announcement as a series of gerbils coming out of a magician’s hat. The BBC’s political editor called it “a generational change in the rate of spending on the bricks and mortar of the public realm”.
Here are some of the Budget’s key measures:
Controlling the coronavirus. At least £12 billion will be spent to combat the spread of Covid-19, providing a short-term vaccination for the economy. Of this, £5bn will go to the NHS, with more available if necessary. Meanwhile, £7 billion will go to those workers and businesses affected by the outbreak.
Taxing big companies. Corporation tax rates, which previous Tory governments had said would keep falling, will stay at 19%. Additionally, the government will be enforcing an extra 2% tax on the UK revenues of major digital players like Facebook and Google – despite US opposition.
Environmental concerns. Sunak proclaimed, “This government intends to be the first in history to leave our natural environment in a better state than we found it.” Carbon capture clusters and electric-car charging schemes will both receive generous funding. A new plastic packaging tax will also be enforced.
Infrastructure bonanza. Acknowledging that talent is spread evenly across the country but that opportunity is not, the chancellor announced that over £600 billion will be spent on roads, railways, communications, schools, and power networks all over the UK. This includes millions of potholes being filled in, and 40 new hospitals being built.
Investing in ideas: The chancellor said that he would be scrapping the “reading tax”, making it easier for ebook and newspaper publishers to operate. He also declared that investment in research and development would increase to a huge £22 billion a year.
So, was this really a historic Budget?
Loosening the purse strings
Yes. This represented the end of a decade of austerity and the most ambitious spending plans in a generation. Even the Guardian’s political editor said it sounded more like a Labour Budget than a Conservative one. Following the election, this optimistic, free-spending Budget confirmed the Tories’ one-nation transformation. Sunak even said that the Conservatives were now “the real workers’ party”.
Not quite. By returning to the sort of spending advocated by the Labour Party, Sunak could be seen as acknowledging that Tories had lost the economic argument. Jeremy Corbyn described it as an “admission of failure”. Additionally, the issues that will matter most to the country in the coming years, such as the environment and the social care crisis, were not addressed as much as they needed to be.
- Which Budget announcement are you most excited about and why?
- If you were in charge of the Budget, what extra policies would you have announced?
- Imagine you are the government. In groups of four, decide how you would split £100 million on the country. How much would you spend on education? Or on the military, for example?
- Read through the Budget documents yourself and find two measures (not mentioned above) that you find interesting. Write a paragraph explaining why they matter and share the information with the person sitting next to you.
Some People Say...
“Don’t tell me what you value, show me your Budget, and I’ll tell you what you value.”Joe Biden, current leader in the race to take on Donald Trump for the US presidency
What do you think?
Q & A
- What do we know?
- The Office for Budget Responsibility said that yesterday’s announcement represented the biggest government giveaway since 1992. Rishi Sunak had been in the job for less than a month. Traditionally, the chancellor is allowed to drink alcohol during the Budget Speech. The word “budget” comes from an old French word “bougette” meaning a little bag to carry money.
- What do we not know?
- We do not know how much impact the coronavirus will have on the economy in the long-term. We do not know whether the amount of borrowing needed to fund many of the new spending plans will be financially wise. Also, we don’t know why – in such a short space of time – the Tories appear to have changed their entire economic policy.
- A state of affairs where there is no growth.
- A small rodent, formerly known as a desert rat.
- Bricks and mortar
- An expression meaning “in the real material world”, as opposed to online or in theory.
- Corporation tax
- A tax on the profits made by companies. The UK’s rate is lower than many similar Western nations.
- Carbon capture
- Technology that removes carbon from the atmosphere and stores it, helping the fight against global warming.
- A set of attitudes and policies advocated by former Conservative PM David Cameron and his chancellor, George Osborne, to cut back on public spending following the 2008 financial crash.
- Political philosophy espoused by some Conservatives, whereby politicians should seek out measures that benefit the whole of society.
- Social care
- In UK domestic politics, this refers mostly to the system of care for elderly people, which has been in a precarious state for years.