Sunak hits his limit – but is anyone listening after Covid?
The Government wants to get back to what might be called traditional Tory values
LAST week I reported in this column that the Government would announce decisions about the HS2 high speed rail line and Northern Powerhouse rail project before the Budget, taking place on Wednesday, October 27.
The Budget has been and gone, and you’ll have noticed that no such announcement has been made. But what I said, as the saying goes, was true when I wrote it. That was the plan.
However, the announcement was delayed, and stakeholders such as local political leaders and the leaders of regional organisations, in the
North as well as the Midlands, were told late last week that the announcement had been put back to MidNovember.
According to reports, the delay came after Prime Minister Boris Johnson saw the plan, and insisted it wasn’t ambitious enough.
Chancellor Rishi Sunak is reportedly keen to cut costs, as part of his attempts to control spending and get taxes down.
Mr Johnson, on the other hand, wants to go big on the rail plans, to prove he means what he says about “levelling up” the country.
It’s also said that the plan may not provide all the answers that regional leaders have been hoping for. This includes a firm decision about whether to go ahead with building the eastern leg of HS2, due to run between Birmingham, the east Midlands and Yorkshire.
The draft Mr Johnson saw, at least, left that option open, neither ruling it in nor out.
Here’s hoping the document provides more answers than that, when it’s finally published.
The only thing Mr Sunak had to say on the matter, in his Budget speech to MPs, was: “Our Integrated Rail Plan will be published soon, dramatically improving journey times between our towns and cities.”
Budget documents published by the Treasury set out the plan for the immediate future, revealing: “Connectivity across the country will be boosted through over £35 billion
of rail investment over the next three years.”
The documents said this funding would include “High Speed Two, rail enhancements and vital renewals to boost connectivity across the country – focusing on the Midlands and the North.”
However, no more detail is forthcoming for now. The bulk of the £35 billion will be spent on the first phase of HS2, linking London and Birmingham, which we already know is going ahead.
As I reported previously, West Midlands mayor Andy Street is optimistic that the Government will also approve a £2bn scheme called the Midlands Rail Hub, which involves expanding Moor Street station in Birmingham and improving rail services
between the East Midlands and West Midlands.
But he, along with other local leaders in both the east and west, want the eastern leg of the high speed rail line to be built as well, connecting Birmingham’s HS2 station at Curzon Street with a proposed new East Midlands Hub station at Toton, Nottinghamshire.
While Mr Sunak had
little to say about HS2, there was a clear message from his Budget.
He wanted us to know that the economy is surprisingly strong, as the nation recovers from the Covid crisis.
And while it’s been widely reported that he’s keen to pay off the huge debts the Government ran up during the crisis – the National Audit Office says the Treasury has spent £370 billion so far dealing with coronavirus – Mr Sunak made it clear there would be no return to austerity.
The Chancellor insisted: “There will be a real terms rise in overall spending for every single department.”
And there was perhaps a hint of criticism of spending cuts imposed by previous Chancellors, as he revealed he was finally undoing the damage they inflicted on schools budgets.
Mr Sunak said he was providing an extra £4.7 billion for schools which, on top of money from previous announcements, “will restore per pupil funding to 2010 levels in real terms”.
Labour MPs point out, understandably, that this means the Government is simply returning school funding to the position the Conservatives inherited from Labour, when they formed a Government in 2010 (initially in partnership with the Lib Dems).
But this doesn’t seem to do Mr Johnson and his colleagues any harm. In theory, perhaps, voters could see it as an admission that Conservative governments are bad for public services.
But it appears many voters see Mr Johnson as a new broom, rather than a continuation of the Tory governments that came before.
Mr Sunak also admitted that “taxes are rising to their highest level as a percentage of GDP since the 1950s”.
But he said: “My goal is to reduce taxes.” By the time of the next election, he said, “I want taxes to be going down not up. My goal is to reduce taxes.”
And he spoke about one of the problems that has troubled Conservatives in recent months – the difficulty in removing the measures introduced to help people during the Covid pandemic. Even if the measures were presented as strictly temporary, it turns out to be very difficult to end them without provoking an outcry.
Examples include the £20-a-week Universal Credit increase and providing free school meals during school holidays.
The Government wants to get back to what might be called traditional Tory values, based on Mr Sunak’s comments. He said: “Do we want to live in a country where the response to every question is: ‘what is the government going to do about it’?
“Where every time prices rise, every time a company gets in trouble, every time some new challenge emerges, the answer is always: the taxpayer must pay?
“Or do we choose to recognise that Government has limits. That Government should have limits.”
It reflects a fear, perhaps, that Covid has made many people and businesses more dependent on the state – and they seem rather to like it.