Let the commentators maul it first, then settle down and see what can be rescued. Even so – tax; more tax. What we need for the economy to recover is a Conservative government, after 11 years of whatever we have had.
Is that cynical? Perhaps. Most of the Government’s actions have been Conservative, and allowed enterprise, but the tax burden is a brake on enterprise. It is not just hindering mathematically determined economic growth, but hindering investment in developing innovative techniques which will reduce commercial costs, leading to a reduction of domestic prices. Increasing household income boosts spending, and so growth again. Until the tax burden comes down though, we are just ticking along, with no development and no end in sight.
There is no escape either as we cannot see a way to vote a tax-cutting Parliament into power.
All that said, there is nothing actually wrong with any of Rishi Sunak’s announcements. It is the context which is dangerous. There is nothing wrong with budget responsibility rules – even Gordon Brown had those, which he abandoned as soon as he moved next door to Number 10. There is nothing wrong with spending on strategic projects either, and if the usual waste and corrupt mismanagement could be factored out then each of those projects would be a worthy project for the spending in question – if that were all the spending.
Projects end, and budgets end. If government largesse moves from the south to the north, to provide Bury and Barrhead with the infrastructure that the South-East takes for granted, very well and good – as long as it is spending moving north, not duplicated in the north while still being splashed out on overfed areas in the south.
The 0.7% to be sent on overseas aid frustrates many, as waste doing no good. However if we are to take Rishi Sunak at his word, then capital spending should go on creating capital assets – instead of handing money away to ill-disciplined countries’ treasuries, it can be used to acquire assets for mutual benefit. When the Chinese government hands out its billions it is to build ports and railways, either as a secured loan or to acquire the assets, which the Chinese state continues to own and control. That is where the aid should go: acquiring assets to promote trade on true principle, and which can later be sold to investors.
There is plenty of scope for reductions in spending and borrowing outside those areas newly announced: there are no longer millions of pounds of ordnance being exploded all over Afghanistan, there are no furlough subsidy payments, no tributes paid to the coffers of Brussels, and in fact capital payments should be coming back out of the European Investment Bank capital. These savings must not be seen as free money ready to be spent again; they are savings the taxpayer should enjoy, repaying debt and cutting tax, for everyone.
The civil service remains bloated and could be cut by half or more without anyone much noticing the difference in service provided, yet it is still recruiting (and still producing pointless reports which prove the redundancies in the ranks).
All this can be done to stem the waste without troubling a penny of those expansive pledges of this week.
- Rishi Sunak’s budget speech (March 2021)
- Tax shot through the foot
- Hobbes manifesto: taxes and publique charity
- The Free Ports Opportunity: How Brexit Could Boost Trade, Manufacturing and the North by Rishi Sunak
- By Boris Johnson:
- Woke: A Guide to Social Justice by Titania McGrath
- The Madness of Crowds: Gender, Race and Identity by Douglas Murray
- Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay (1841)
- 12 Rules for Life: An Antidote to Chaos, by Jordan B Peterson
- By Aristotle:
- By David Cameron: