This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/uk-news/2020/mar/11/economy-still-vulnerable-despite-budget-spending-spree
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Economy still vulnerable despite budget spending spree | Economy still vulnerable despite budget spending spree |
| (32 minutes later) | |
| Rishi Sunak’s plan to win over public with big spending could be thrown off course by coronavirus | Rishi Sunak’s plan to win over public with big spending could be thrown off course by coronavirus |
| Many Tory MPs appeared ecstatic at Rishi Sunak’s budget, which cast off the shackles of austerity and budgetary restraint. | |
| The 39-year-old, who has only been in post for a month, was praised as calm and bold by colleagues, as he took the Conservative party in an entirely new direction of big spending, never mind the deficit. | The 39-year-old, who has only been in post for a month, was praised as calm and bold by colleagues, as he took the Conservative party in an entirely new direction of big spending, never mind the deficit. |
| But looking behind the scenes, the decision to embark on a £175bn spending spree can really be chalked up as a victory for Dominic Cummings, Boris Johnson’s chief adviser, who has long been fighting within Downing Street for a loosening of budgetary constraints. | But looking behind the scenes, the decision to embark on a £175bn spending spree can really be chalked up as a victory for Dominic Cummings, Boris Johnson’s chief adviser, who has long been fighting within Downing Street for a loosening of budgetary constraints. |
| It also gives a clear sign of the kind of prime minister Johnson is likely to be – a leader who is more concerned about spending enough money to help him win the next election than sticking to old Conservative notions about sound money espoused by David Cameron and George Osborne. | It also gives a clear sign of the kind of prime minister Johnson is likely to be – a leader who is more concerned about spending enough money to help him win the next election than sticking to old Conservative notions about sound money espoused by David Cameron and George Osborne. |
| Sajid Javid, who was effectively forced out as chancellor, had wanted a very different budget that was more cautious about turning up spending, with potentially bigger personal tax cuts as well as tax-raising measures. | Sajid Javid, who was effectively forced out as chancellor, had wanted a very different budget that was more cautious about turning up spending, with potentially bigger personal tax cuts as well as tax-raising measures. |
| But Cummings has once again come out on top, putting first what the Tories think are the priorities of their new northern and Midlands voters: more spending on public services, better transport infrastructure and broadband access. | But Cummings has once again come out on top, putting first what the Tories think are the priorities of their new northern and Midlands voters: more spending on public services, better transport infrastructure and broadband access. |
| As for how to pay for it all, the red book shows just £28bn of tax revenue raised from policy measures over the same five-year period. | As for how to pay for it all, the red book shows just £28bn of tax revenue raised from policy measures over the same five-year period. |
| The government is relying on billions saved from spending on the EU budget to make up part of the gap. But extra borrowing for capital investment will also be a major part of how to pay for this spending splurge, with the Conservatives’ fiscal rules set by Javid in December very likely to be junked as part of a forthcoming review. | The government is relying on billions saved from spending on the EU budget to make up part of the gap. But extra borrowing for capital investment will also be a major part of how to pay for this spending splurge, with the Conservatives’ fiscal rules set by Javid in December very likely to be junked as part of a forthcoming review. |
| However, the spectre hanging over the entire budget was the threat of coronavirus, with neither the £12bn of emergency measures to help workers and business, nor the overall likely effects on the economy taken into account in either the Treasury or Office for Budget Responsibility’s calculations. | However, the spectre hanging over the entire budget was the threat of coronavirus, with neither the £12bn of emergency measures to help workers and business, nor the overall likely effects on the economy taken into account in either the Treasury or Office for Budget Responsibility’s calculations. |
| The government’s plans to win over the public with big spending could yet be thrown off course if the coronavirus leads the UK and entire world into a recession. Although Sunak will try to stress his quick actions to mitigate the impact on the economy, governments in charge when a downturn hits are likely to pay a price at the ballot box regardless of how much they are to blame – as Labour learned to its cost in 2010. | The government’s plans to win over the public with big spending could yet be thrown off course if the coronavirus leads the UK and entire world into a recession. Although Sunak will try to stress his quick actions to mitigate the impact on the economy, governments in charge when a downturn hits are likely to pay a price at the ballot box regardless of how much they are to blame – as Labour learned to its cost in 2010. |
| So while Labour MPs looked glum about Sunak’s decision to turn on the fiscal taps, the new chancellor is still facing a perilous time ahead. And in the end, vast amounts of spending on roads or broadband infrastructure will seem to matter very little if the coronavirus wreaks havoc on jobs and businesses. | So while Labour MPs looked glum about Sunak’s decision to turn on the fiscal taps, the new chancellor is still facing a perilous time ahead. And in the end, vast amounts of spending on roads or broadband infrastructure will seem to matter very little if the coronavirus wreaks havoc on jobs and businesses. |