Lots of new spending, but where’s the reform?
Even he gets nothing else done, Rishi Sunak knows how to deliver a Budget speech. Some Chancellors are bumptious, others deathly dull. He was neither. Furthermore, his jokes were well-judged and actually funny. All-and-all, an assured performance from a very new Chancellor.
Except for one thing, a verbal tic: He kept referring to the “Conzervative” government — and, no, that’s not a typo.
Who are these Conzervatives? What do they want? What have they done with the Conservatives who used to run the country?
Judging by the Budget, Conzervatism is all about spending lots and lots of money. There was a massive £30 billion package of measures to offset the economic impact of coronavirus. There was also a longer-term programme of increased infrastructure investment, massively higher funding for R&D and more money for public services.
Clearly, this is directed at the Government’s levelling-up agenda. But while a substantial increase in the level of long-term capital expenditure is necessary, it is not sufficient. As the now-vanished Conservatives used to tell Tony Blair and Gordon Brown, it’s not just how much you spend that counts, but how well you spend it. And on that front, the new Conzervative government lacks a coherent reform agenda.
If you’re spending tens of billions of pounds extra, then at the very least include some genuinely imaginative projects: the sort of game-changers — like Phillip Blond‘s idea of an “MIT of the North” — that might make all the difference.
To be fair, there were a few points of genuine interest. For instance, Dominic Cummings will get his ARPA-style, blue sky research agency. There was a major commitment to establishing two industrial ‘clusters’ specialising in carbon capture and storage (CCS) technology — which, if it works (a big if), could be of great strategic value to British manufacturing. Sunak also confirmed that the government would review the Treasury ‘green book’ rules that currently bias infrastructure investment towards London and the South East.
Good stuff. Less encouraging was the absence of any real reforms to housing policy — all we got was another box of sticking plasters. Hopes that the Government might look into Land Value Taxation have also come to nothing, so far.
As for the devolution agenda, there was talk of “London style” funding deals for metropolitan authorities, but not the radical decentralisation this country so desperately needs. Indeed, the mention of moving 22,000 thousand of civil servants out of London and the establishment of a Treasury “campus” somewhere in the North indicates that this Government wants to extend itself into the regions, not give away its power.
Most dispiriting was the £27 billion for strategic road investment. By all means fill the fifty million potholes the Chancellor mentioned, but decades of experience has told us that new roads are not a sustainable solution to our transport issues. Time-after-time, we’ve seen new capacity get congested with new demand and we’re back at square one again because the underlying problem hasn’t been tackled.
There’s a metaphor here for governments who splash the cash, but duck the real reforms.