Rishi Sunak's Spending Review and Budget announcement signals the Chancellor's leadership ambitions, Birmingham City University Associate Professor Steven McCabe has suggested.
"Chancellors delivering budgets have a tricky line to tread in trying to keep everyone happy,” he said. “The budget was, as many suspected, intended to serve multiple audiences.
"Firstly, to cement his ambitions as the successor to Boris Johnson should his party decide the country needs a new leader. As such Sunak’s statement was loaded with nods to his desire to engage in fiscal responsibility and to reduce borrowing on an unprecedented level needed to deal with a once in a century economic crisis caused by the pandemic.
“Secondly, Sunak’s statement was intended to echo the somewhat simplistic, but it must be acknowledged, hugely successful lines concerning levelling up and boosterism so emblematic of Johnson’s leadership. As Sunak is only too well aware, in order to stay in the game, you must be part of the gang.
“This budget is about keeping the boss happy and attempting to make it extremely difficult to sack him. Finally, and critically, budgets are an attempt to improve the electoral prospects of a party.
“This budget had enough enticements to those who were persuaded to switch from Labour in December 2019, the ‘Get Brexit done’ election when, we were told there was an ‘oven-ready’ deal. However, as we are discovering Brexit, in terms of the Northern Ireland Protocol, rumbles on and threatens to be an issue next time we hit the polls.
“As respected body the Office for Budget Responsibility (OBR) points out, Brexit, as well as magnifying the impact of global supply-chain disruptions for the UK, Brexit will have the consequence of a drop-in trade with the EU of 15% which will reduce productivity by 4%. Businesses, suffering from supply-side problems and, like the rest of the population, rapidly increasing inflation may feel what was offered was ‘small beer’, now, like sparkling wine, cheaper.
“The announcements about investment in innovation and technological development, welcome as they are, will do nothing to alleviate the problems confronting millions in the next few months. Whether there’s any real money or, as many suspects, simply a recycling of existing commitments will emerge in the next few hours when careful analysis is carried out.
“Any notion we’re going to enjoy a ‘golden age’ of prosperity based on a ‘new economic model’ based on higher wages and productivity will seem hollow to those facing rapidly increasing bills for energy and food. Levelling up, a nebulous concept at the best of times, will not have become any clearer on the basis of the contents of this budget.”
