Post-Corona, the Tories will have to buck up their budget ideas

Published by FREE MARKET CONSERVATIVES on

BY TOM HARWOOD

It seems almost unbelievable that the budget was less than a week ago. The moment in the political calendar that almost everything had been building up to for months has fizzled out without much of a trace in just a few days. Since Wednesday we have seen more than a dozen MPs self-isolate, American travel bans, and a rhetorical step change from the government when it comes to tackling coronavirus. Sweeping legislation is now expected in days to deal with the new pandemic.

While minds and conversations are rightly dominated by this impending sociological, economic, and biological crisis – it is important to not simply skim over what would otherwise be the premiere political issues driving debate. 

We endured a fantasy budget.

Aside from the Chancellor’s enormously cheeky get-around of excluding coronavirus related spending from fiscal rules calculations, the claimed economic backdrop to this budget was a lie. By claiming that this was a budget that fits within the Conservatives’ fiscal rules, the Government is attempting to take the public for fools.

The OBR’s accompanying numbers flatly refused to take in to account the severe effect coronavirus is having on the global economy – extraordinarily forecasting modest economic growth in the UK this year. That is simply not going to happen.

To some extent it would have been preferable for the Government to admit that in this extraordinary year they will not meet their fiscal rules, and give a cast iron read my lips guarantee that they would next year. The Chancellor claiming this bloated budget somehow stayed inside his fiscal lines makes it harder to believe that next year will be any different.

The UK is already hurtling towards recession, as last quarter’s parliamentary paralysis prompted zero growth is now to be complimented by enormous supply chain issues, a global halt to travelling, and a workforce that is soon to be largely confined to places other than work.

It beggars belief that this was the backdrop to which it appeared to be claimed that mythical economic growth would allow (non-coronavirus related) government spending to eek within his fiscal limits. This is pure fantasy economics. Not that this country’s useless Loyal Opposition raised that point at all.

It fell to former Chancellor Sajid Javid to stand up for fiscal responsibility from the back benches, taking on the role of that friend who lets his mates know when they’ve had too much on a night out. Saj gently suggested to our spend-happy government that they can’t go on like this. His statement emphasised that “the fiscal rules that we set out in our manifesto are important. Sticking to those rules in normal times is what separates us from the parties opposite.”

He is right. Whilst coronavirus changed the context of this budget, there were deeply worrying signs that future statements from this Chancellor will find yet more excuses to wave fiscal discipline out the window. 

A fresh faced Rishi Sunak delivered a speech in response to Osborne’s 2015 Budget in which he stood against profligacy, tax, and debt. Younger Rishi stood up for the next generation who will be burdened by such a policy, and championed the importance of a government that lives within its means: “No more spiralling debt at the taxpayer’s expense. No more passing the debt to the next generation… For too long, Governments have got that back to front, spending first, ignoring how much is coming in, then letting borrowing endlessly make up the difference.”

Next time he should follow his own advice.

Tom Harwood is an award-winning journalist and commentator. Follow him on twitter: @tomhfh