What ever happened to the Budget?

The pandemic goes economic, who will win who will pay?

New blue tree! New blue tree!
In the first budget by Chancellor Rishi Sunak we saw a new species of tree. A new tree? Yes we did! Gone is the Labour party money tree the mythical giver of low hanging fruit for all and in its place stood the mighty Blue tree. This is a cross between a hardy traditional Oak and some fancy hybrid that just keeps on giving. But then days later from Sunak came the measures to deal with Covid-19. Here was not so much a money tree but a forest. Confused? You are not alone! The first question must be was the Government caught out by the spread of C-19 and if so why? At the moment we are so busy dealing with the virus the lessons will come later. Thinking about budgets as recently as Nov 2019 the Labour party was taken to task for its money tree promises to spend, spend, spend. But that is what we now see and very late in this Covid-19 crisis we also see questions being asked about this spending. Can you really out-spend a pandemic? A spending spree is such a tempting thing for a government to do. But if it goes wrong then it opens the door for your political opponents. So to stop this political to-and-fro Tony Blair gave us fiscal rules. The idea was to lift the financial management of the nation away from political pressure. What could go wrong? Well plenty, it was as most things with Blair an act, a delusion. So it was a bit of theatre to call for first Sajid Javid then Sunak to ignore the fiscal rules so as to make progress. When Blair created his fiscal rules he gave powers to civil servants and others and he took a chance. There was a risk, some officials we could trust but the behaviour of Mark Carney at the Bank of England and his support for Remain is worth remembering. The Sunak budget, on the instruction of the PM, broke fresh ground by creating a new concept on spending. However, while all this was going on Covid-19 was daily becoming more of a threat to our way of life. Looking back we may wonder why the Covid-19 economic measures seemed to come at a rush after the budget. Was Sunak so new to the job he had little time to prepare or was the government caught out by the economic aspect of Covid-19?

And what of Sunak himself? He has the advantage of being a new face and a Leaver from the start. He looks a good bet, this will help him when placed alongside other Chancellors. George Osborne was stuck with a poor public image. Things got worse when Philip Hammond took over the Chancellor's role as all he did was try to frustrate Brexit. While Sajid Javid started out a Remainer he like many others rapidly converted to devout Leaver when a chance to advance came along. But it was all a bit half hearted and he failed to spot the trap set for him. So overestimating his value, he fell into the trap and was gone. However, Sunak did in his original Budget speech say that he would consult with 'experts' about revising the fiscal rules and publish a report in the Autumn. This makes your heart sink. It was Michael Gove who warned us about experts back in 2016 before the Brexit referendum! We then had years of experts telling us the sky was to fall in due to Brexit. Now we have experts telling the Government what to do about Covid-19. However, much as the experts told David Cameron how to win the 2016 Brexit referendum the quality of the scientific and medical advice on Covid-19 is equally unreliable. That being so we marvel at the way the economic advice seems to be lacking. The country is being led by a government who only listen to academic medics. It was a popular joke that if you wanted four opinions on the economy then you asked three economists, contradiction being part of their trade. There is such a wide range of 'scientific' opinion on Covid-19 that clearly some of it is wrong. So we had poor conflicting advice on Brexit the same again now on Covid-19 but nothing on the economy. This must be the wrong way to be going. The problem is compounded by yet more NHS worship a topic we have covered here.

Since the general election we had been told that infrastructure was the cure-all for whatever ailed us. It was to be 'transformative'. But then along came Covid-19, that too we are informed will change us forever. Sure enough we saw the government hold virtual cabinet meetings via Zoom. As we were all in lock down that was the thing to do. However while business suffers and bankruptcy looms the government carries on as though nothing has changed. The much loathed HS2 project has been given another lease of life only the Government fails to see how unpopular it is. But then as the floods at the start of the year have faded from memory we no longer hear of flood defences. It was ironic that while the infrastructure meme thundered on and on, some parts of the UK were under flood water. A 'magic railway' at an insane price, but years away from delivery what kind of a compensation is HS2 in those conditions? The once popular term,'levelling up', seems to fallen out of favour but one man's 'levelling up' is another's levelling down; the bills will have to paid eventually no matter how cheap it is for a government to borrow money. What will transform us is this wretched virus but how do you spend money to stop a virus and how do you keep public support with a long and damaging lock down? In a way we should feel sorry for Sunak. No doubt he wanted the top job but things have changed. He is no longer managing the economy bur running behind a crisis. and some say large parts of this crisis could have been avoided

But then so is the PM running to keep up. He has his position and 80 seat majority because of Brexit. We must never forget that the public gave him their support. And that this support is vital to the survival of the Conservative party. The PM is now back at work, what can he expect to find? The decisions made sometime back about mad infrastructure projects, Huawei and a carbon neutral economy were 'accepted', but not really endorsed, by the public. Again we remind ourselves that post Covid-19 things will have changed. It could well be that the political honeymoon is over; that we have an odd situation of a popular PM but disquiet about the Government's policies. Within the Government there has been a long tradition of independent thinkers. We had the ERG pushing for Brexit, although disbanded any hint of backsliding on Brexit and it will be Boris Johnson not Theresa May who will come under pressure. Other subjects loom, we have mentioned some, each will have its awkward squad. Conservative MPs have become used to coming forwards with opinions that the PM might wish would go away. The arrival of Keir Starmer as Labour Leader makes little difference. Labour is in such a poor state and the 80 seat majority means Conservative backbenchers who wish to, 'make a stand', can do so. The public are looking for reform to all sorts of things but Covid-19 has held this up. Boris will be busy on his return or there will be trouble. As we keep hearing, Covid-19 will change many things, but the public will wonder if government wants to change and can change the way it works.