The Chancellor embraces 'Spend, Spend, Spend'
Another impressive performance by Rishi Sunak. Our young Chancellor’s political stature continues to rise. There is agreement across the political spectrum that Sunak has not put a foot wrong since his first statement announcing the government’s proposals to deal with the pandemic.
Today’s ‘update’ was noticeable for the Chancellor’s enthusiastic embrace of government intervention in almost every aspect of our lives. For the moment at least, free market, small state Thatcherism is dead.
The Chancellor’s ‘Plan for Jobs’ includes the following measures :
- ‘Jobs Retention Bonus’ to encourage the transfer of furloughed workers back into full-time jobs by rewarding employers;
- ‘Kickstart Scheme’ which will financially reward employers who employ 16-24 year olds;
- Paying employers to create new apprenticeships;
- ‘Green Homes Grant’ to encourage more energy efficient homes;
- Scrapping stamp duty on homes under £500k until 31st March 2021;
- ‘Green Homes Grant’ to encourage more energy efficient homes;
- Scrapping stamp duty on homes under £500k until 31st March 2021;
- VAT cut from 20 per cent to 5 per cent on food, accommodation and attractions; and ‘Eat Out to Help Out’ which will part fund eating meals at participating restaurants.
The ghost of Gordon Brown was reportedly seen hovering behind the Chancellor as he delivered his statement!
It seems a long time ago when the Labour Party’s attack on the PM was that he wanted to turn the UK into a western version of Singapore. The accusation now looks at best ridiculous. The PM is leading the most interventionist government since the days of Clement Attlee, Hugh Dalton and Aneurin Bevan. This is a situation which is politically, let alone economically, unsustainable in the longer term.
At some undefined moment in the future, the Chancellor will have to make a serious correction to the government’s economic agenda. It must become once again Tory. When it happens, it will be politically very bloody. It will be at this moment when we will see the true political mettle of Rishi Sunak. For now, he is the nation’s favourite politician.
Ironically, the Chancellor’s popularity should worry Tory strategists looking ahead to the next general election. In normal times, people vote Tory for lower taxes and a small state. These aren’t normal times but the government must not allow itself to start believing that additional spending solves every problem. It doesn’t ...
The Chancellor would do well to remember what happened to Pools winner Viv Nicholson who announced she would ‘Spend, Spend, Spend.’ She ended up with a huge tax bill and was declared bankrupt. QED ...