A budget for the decades

By Simon Gentry

As we count down the hours to what will be the most important budget this century so far, the work that is going on the Treasury will most likely define the political fate of the country, the Prime Minister, the Leader of the Opposition, both the large political parties and the Union itself.

Key to this is the pace of economic growth and how skilfully the government can steer the economy, increasing the amount of tax it collects to address the huge interest payments we now face every year, whilst not throttling growth and investment.  This is harder than it appears.  The government wants the UK to be a place that is attractive to investors, wants to keep employment high and drive investment across the country, not just the South East.  It also needs to raise historic amounts of tax revenue.

If they can pull this balancing act off the Prime Minister’s poll rating will continue to climb.  Delta Poll show today that Mr Johnson’s approval rating is up another 9% in the wake of the vaccine programme.  A booming economy later this year would, presumably, add to his public approval rating allowing him to focus on the issue of Scotland and remaking Britain’s place in the world.

It will also make Sir Keir Starmer’s position more difficult, fuelling the left-wing of the Labour Party who see him as timid and insufficiently radical and soft on the Conservatives.  His forensic, lawyerly, thoughtful style isn’t exciting enough for the Left and the public seem content to pay little attention to him while they focus on getting through the pandemic.

The PM’s popularity will reinforce the Leave/Thatcherite faction currently in control of the Conservative Party, and allow it to continue to be a rather populist, flag waving Atlanticist party, focused on the aspiring classes and pledged to low taxes and light regulation.   That leaves the Labour party in a dilemma.  Thatcher captured many of the ‘working class’ vote with her message of aspiration and merit, breaking the class-party link.  These days the only large group of workers that Labour can really rely on is public sector, everyone else is up for grabs.

That just leaves the fate of the Union and the SNP. The rapid changes of personel in Downing Street in recent weeks point at a change in strategy.  Until recently the focus was on an aggressive Vote Leave style campaign to crush support for separation.  Michael Gove – a Scot – and his team favour a strategy that is almost the opposite and they appear to be winning. The emerging direction seems to be focussed on loving Scotland into choosing to stay part of the Union. Expect more spending in Scotland to be direct and not through the Scottish Government.  Expect it to be clearly braded as ‘British’ spending too, making it clear that if Scotland did vote for separation, that funding would not be there. We should also expect to see Scottish conservatives in higher profile roles, proving that the role of Scotland in the United Kingdom is valued and important.  The only wrinkle is time.  The longer the government have to roll out this strategy the more likely they think they will be in convincing ore Scots to vote to stay.  Talk of the terms of separation being negotiated ahead of any vote taking place is part of delaying the decision until the new strategy has borne fruit.  The scandal currently engulfing the SNP will no doubt be used by the government in the next few months and years too.

Rishi Sunak will make the most important statement of his life on Wednesday but its contents will have implications for years and potentially decades to come.