Rishi Sunak has delivered a “Labour Budget with a Tory twist”, says Allister Heath in The Daily Telegraph. Gordon Brown would have relished it: a reckless splashing of cash “in every possible direction”, with the future budgets of government departments swollen by an average of £30bn in each year. Spending will account for 41.6% of GDP by 2026-27, the largest share since the troubled 1970s. There’s also a “staggering” rise in taxes from 33.5% of GDP before the pandemic to 36.2% by 2026-27 – the highest level since the 1950s. Sunak is a low-tax Tory at heart, but he has been forced to deliver his boss Boris Johnson’s vision of a “managerialist, paternalistic and almost municipal state”. Labour should be rejoicing: “The party may not be in office, but when it comes to the economy and public spending, they are very much in power.”
If only, says Aditya Chakrabortty in The Guardian. Behind the “umpteen press releases” and Sunak’s sunny speech, the detail is “much grimmer”. The £6bn cut to universal credit, which affects “some of Britain’s poorest people”, is only being partially reversed. Those on the benefit and in work will keep more of their wage, but the unemployed will see nothing of Sunak’s “largesse”. And with “surging inflation” of at least 4%, and record-high taxes, real household incomes will barely rise over the next five years.
The Budget wasn’t exactly green either, says The Independent. Taxes on domestic flights were cut and fuel duty was frozen for the 12th year in a row. “There was nothing for home insulation, nothing to bring the cost of electric cars closer to affordability and nothing practical about speeding the replacement of gas boilers by a sceptical public.” There was also no plan to create the green jobs and technologies that Britain needs to fulfil its ambitious carbon-cutting objectives – hardly a good look with Cop26 starting on Sunday.
“Like toddlers trying to walk in their mums’ high heels, Conservatives dressing up in left-wing ideas will never get it quite right,” says Gaby Hinsliff in The Guardian. But the Tories will be “stuck in these uncomfortable shoes for the long haul”. An ageing population in need of medical and social care will create a “structural imperative to tax and spend in coming decades”, especially if Brexit hobbles economic growth. Far from cutting taxes, as Sunak longs to do, he might have to raise them higher still.
Setting out his stall for No 10?
The Chancellor may come to regret this “big state, high tax” approach, says Matthew Lynn in The Spectator. He “clearly has his eyes on becoming prime minister sometime in 2025 or 2026”. By opting for a Budget of “quick fixes, gimmicks and short-term popularity”, he has ensured that if he gets to No 10, “he will be stuck with an economy that is starting to fall apart”.