Sunak's prescription to fight virus and keep economy healthy

THIS was an immense Budget, in terms of the numbers involved and in terms of the new changed mindset of Conservative Britain – and it rustled up £30bn to enable us to survive the coming coronavirus storm.

The Budget blew the lid off the austerity of the last 10 years.

It promised £175bn will be splashed across Britain on roads and railways, on colleges and rough sleepers, on the NHS and on trying to ensure businesses can withstand the virus’ ravages.

When Chancellor Rishi Sunak said his Budget represented the biggest public investment since records began in 1955, Boris Johnson, sitting behind the Richmond MP, puffed his cheeks out in over-awed admiration.

The Prime Minister will know that back in 1955, Britain was a very different country with vast nationalised industries gobbling up Government investment. Mr Sunak’s Budget, then, represents the biggest ever investment in modern Britain.

The new blue wall Tories – Bishop Auckland MP Dehenna Davison, Redcar's Jacob Young, Stockton South's Matt Vickers and Darlington's MP Peter Gibson with the camera – queued early for the Budget and sat together

It was not a Budget that you could imagine George Osborne or Philip Hammond giving.

For a start, Mr Sunak, just a month into the job as Chancellor, grew visibly in confidence as he presented it. As lean as his pencil thin tie which he appeared to have borrowed from a 1980s synthesizer duo, he started very subdued as he presented a prescription to tackle the virus.

But then he moved onto the real Budget and this man who was a wooden stand-in during the election TV debates before Christmas was suddenly reborn as a showman, whipping his angular arms so that his MPs joined in his refrain about a Budget that gets things done.

He even rolled into a gag that provoked a gale of genuine laughter. Announcing the removal VAT from e-books, he said: “There will be no VAT on historical fiction by Hilary Mantel, manuals or textbooks like Gray’s Anatomy, or indeed works of fantasy like John McDonnell’s Economics for the Many.”

Mr Hammond would not have delivered a line like that, but then Mr Hammond would not have delivered a Budget like this. Mr Sunak is borrowing an extra £100bn over five years in a manner that is not sustainable: he is increasing day to day spending by 2.8 per cent which is double the predicted rate of economic growth.

A little example of this immense sea change came when Mr Sunak, having namechecked Shakespeare, Jane Austen and Roald Dahl, announced £25,000 for each secondary school to spend on arts activities. This pledge was in the manifesto, but during the decade of austerity the wishy-washy arts were seen as surplus to requirements in schools and in wider society. Times have changed.

“We will invest in broadband, rails, roads – if the country needs it, we will build it,” boasted Mr Sunak. Some non-Johnsonian Tories were looking a little blue around the gills as spending announcement followed spending announcement, and the purist Adam Smith Institute condemned Mr Sunak for “spending like a drunken sailor”.

He has accepted that borrowing, when interest rates are historically low, to invest in infrastructure is a good thing. Perhaps Jeremy Corbyn was right all along. But now where does Labour go? The Tories have used Labour’s absence to occupy the centre ground which once belonged to New Labour just as they have occupied the seats that Labour once thought belonged to them.

“We’re going to change the whole mindset of Government,” said Mr Sunak, “to make sure economic decision-making reflects the economic geography of the country.”

And that geography includes the newly Tory north.

Mr Sunak confirmed that 750 Treasury jobs will move one day to an “economic campus” somewhere up here, and he followed it up with a vague aspiration that 22,000 civil servants might at some point be decamped to the north.

Little ol’Darlo got three mentions in one-and-a-half hours; Teesside will be at the forefront of a £800m carbon capture and storage industry.

But this wasn’t quite the concentrated Budget that the north had being hoping for. There was nothing earth-shatteringly new for the region. Indeed, Mr Sunak only mentioned Mr Osborne’s “northern powerhouse” catchphrase once.

The first Budget after North-East electors lent Mr Johnson their votes was supposed to be the one in which he repaid them, but then coronavirus came along and stole the show. Mr Sunak warned that the virus’ impact would be significant but temporary – and the region will be watching for more detailed action when it emerges from the sick bay.