The Chancellor's Budget featured a host of measures to help fight the Coronavirus emergency, but it might equally be remembered for a complete change in approach to public spending by the Conservatives.
When Rishi Sunak stood up to deliver his first Budget Statement on 11 March it was completely overshadowed by the growing Coronavirus crisis. He had only been Chancellor for a month and only an MP since 2015. The government’s original plan had been to use the first post-Brexit Budget to set a new course for the country and the economy, but the immediate needs of the Covid-19 outbreak meant this Budget had to place short-term needs front and centre.
The Chancellor offered a £30 billion cash injection to support the NHS and other public services tackling the crisis. Changes to arrangements for sick pay will protect workers advised to self-isolate, even if they are not presenting symptoms. There were measures to support self-employed people and support for companies to enable them to pay out statutory sick pay. The British Safety Council has been calling for changes to sick pay to protect the lowest paid workers for some time, and it is clear that more must be done to ensure that the welfare state protects contractors and workers in the gig economy as well – issues we will revisit once the Coronavirus crisis has passed.
Beyond the requirements of the crisis, the budget also revealed a government prepared to tear up the fiscal rulebook that has been sacred to the Conservatives since Mrs Thatcher. This was a budget that would have alarmed her, and perhaps terrified the fiscally ruthless George Osborne. Austerity was firmly rejected in favour of more spending and more tax cuts. And this was Boris Johnson’s budget as much as it was the Chancellor’s. When he reshuffled his Cabinet in January, the Prime Minister insisted that a new team run jointly by No.10 and the Treasury would advise the Chancellor of the Exchequer. That demand was too high a price for Sajid Javid to pay, and he quit the government. This was Boris’ Budget: the have your cake and eat it budget.
The Chancellor has promised more money for schools, hospitals and housing, banking on the growth generated from an injection of cash to prevent recession. He has made good on the Prime Minister’s (and his adviser Dominic Cummings’) fixation on new technology with money for research and development, including in space travel. All of this will allow newly-elected MPs to tell their voters that more money is being spent on them, that the taps are finally being opened.
Normally such a spending spree would be met with measures to raise money – but not this time. Instead unpopular taxes were frozen. There was no increase on the tax on fuel, no increase on duties for spirits or for beer. This presented a challenge for the Labour Party, who have been arguing for an end to austerity and for more public spending – they now find themselves having to agree with the government.
At the time of writing this the ink was barely dry on the budget statement. And budgets have a habit of unravelling under scrutiny – perhaps by the time you read this it already has. It takes time for the real impact of a budget to sink in. This might always be the Coronavirus budget, but it might equally be the budget that is remembered for a complete change in approach to public spending by the Conservatives.
Charles Pitt is head of policy & Influencing at the British Safety Council.
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