Sunak’s Budget Embraces a Spring of Despair

In the wee hours of Friday 13 December 2019, as it became undeniably clear a Boris Johnson-led Conservative Party had driven a coach and horses through Labour’s impenetrable red wall, Andrew Neil speculated aloud whether a northern resurgence would be rewarded by northern investment. This question was answered weeks later when we entered 2020, the pandemic took hold and Johnson’s Conservatives located that magic money tree curiously absent from Theresa’s vineyard and shook it for every piece of fruit. And not only for the north.

In 2002, the aforementioned Mrs May, used her party conference address as chairwoman to remind attendees of their historic association with the ignominious phrase – “nasty party”. She added: “Our base is too narrow and so, occasionally, are our sympathies.” 18 years on, in a set of laudable measures which appeared to shed the dead skin of that era, her prime ministerial successor helped deliver a generous furlough scheme, contributions for small businesses and a £20 per week uplift for Universal Credit claimants. Even political opponents were silenced.

This article appeared in the print edition of the Evening Telegraph on 28/03/2022

However, any comeback of compassionate conservatism was considered short-lived following the UK Chancellor’s spring budget last week. Prior to Rishi Sunak’s statement, the traditionally optimistic Martin Lewis spoke with a level of despondency proportionate to that of an Old Testament prophet. On the Sunday Morning show, he said: “I’ve been the Moneysaving Expert since 2000. I’ve been through the financial crash… through Covid [but] this is the worst.” Calling for political intervention, he added: “I am virtually out of tools to help people now.”

Sunak said addressing the cost of living was at the heart of his budget statement. Highlights included a £3,000 increase to the national insurance threshold from July, a one pence cut to the basic rate of income tax and a five pence per litre cut in fuel duty among other measures. The former of which means workers can earn £12,570 before paying income tax, making a difference to 2.4 million low earners. Beyond that, however, it was hardly earth-shattering material for those on even lower incomes, most of whom neither pay income tax nor drive cars.

Due to global unrest, the Office for Budget Responsibility (OBR) stated: “There is an unusually high level of uncertainty…” Despite projecting further overall economic growth, they warn inflation – currently at 6.2% – could rise to 8.7% by the end of 2022. Their assessment is this will lead to a 2.2% decrease in living standards, the largest reduction since records began in 1956 and even more severe than pressures experienced in the 1970s and 1980s. Last Thursday, “The Up Yours Mini Budget” was emblazoned across every Scottish edition of the Daily Star.   

As we enter the new fiscal year this week, we neither face what Dickens described in A Tale of Two Cities as a “spring of hope” nor a “winter of despair” but a spring of despair. Sadly, this budget provided little reassurance. Nobody expects a repeat of measures introduced in 2020 but, unlike the onslaught of the coalition government’s austerity agenda under a guise of welfare reforms in 2012 and 2013, a brutal era of austerity lies ahead and, this time, not all of it because of our own mismanagement. As the OBR stated, some issues are due to global unrest.

Nevertheless, when individuals and families face potentially cataclysmic cost-of-living considerations, pressing ahead with a national insurance rise, failing to increase tax thresholds in line with inflation and not requiring corporation tax cut beneficiaries to implement a real living wage for all employees, exhibits a desperate lack of imagination and, as usual, it will be the working class who are hit the hardest. As the late English poet Charles Stuart Calverley once wrote: “‘Twas ever thus.”

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