UK government departments will spend an extra £150 billion over the course of the current parliament – “the largest increase this century” – with the Scottish government receiving an extra £4.6 billion a year to spend as a result.
There was also the “biggest business tax cut in modern British history”, the “biggest single-year cut to business rates for 30 years”, and, if that wasn’t enough, “the biggest cut to cider duty since 1923”.
“Today’s Budget delivers a stronger economy for the British people... Let there be no doubt – our plan is working,” the Chancellor said.
All this spending was enough for Paul Johnson, the Institute of Fiscal Studies’ director, to declare “austerity is clearly over”, but he pointed to analysis showing the increases would not offset the cuts made during the 2010s for most departments.
And he expressed concern that household disposable income is expected to grow by just 0.8 per cent a year, while inflation is set to hit four per cent or more. “This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade,” he tweeted.
The business community did not seem overly impressed, with CBI director-general Tony Danker saying the Budget was not “bold enough to deliver the high-investment, high-productivity economy the government seeks” and complaining “businesses remain in a high-tax, low-productivity economy”.
And when they say “high tax”, they really mean it. The measures Sunak laid out put the UK on track for its highest tax burden for 70 years.
High spending coupled with high taxes by a Conservative government put Labour in an awkward position unless they return to Corbynomics, which seems unlikely. But Shadow Scottish Secretary Ian Murray MP came up with one line of attack, writing “never has a Chancellor asked people to pay so much for so little”.
Sunak may hope his positivity will lift a national mood blighted by Covid. But it seems hard to avoid the conclusion that a return to the relative prosperity the UK experienced before the 2008 financial crash remains a considerable distance in the future.