Questions over spending plans

Challenge of balancing books

IN ADDITION to delivering Brexit, one of the central themes of the Conservative Party manifesto that helped deliver Boris Johnson a majority in December was the promise to “level up” every part of the United Kingdom through increased investment in the regions.

As the Prime Minister delivers a speech in Dudley today in a bid to get that agenda back on track with an infrastructure spending blitz in the wake of the devastating health and economic impacts of coronavirus, there are hopeful signs that key parts of the Power Up The North campaign launched by this newspaper and others last year will come to fruition. But a note of caution must still be urged - and not just on ensuring grand promises actually lead to concrete action.

The levelling-up promise in the Conservative manifesto was based on a strategy of reducing the national debt and then investing “prudently and strategically” in the regions. The manifesto also included a signed “guarantee” from Mr Johnson of no rises in income tax, VAT or National Insurance rates.

Coronavirus has clearly driven a coach and horses through Treasury spending plans this year, as unanticipated billions have rightly been required to go into policies such as the furlough scheme to minimise job losses and business closures. It is also encouraging that regional investment is seen as the way out of the economic crisis.

But when Mr Johnson unveils his plans, there will be obvious questions of how all of this is paid for – with no detailed answers likely for months. Labour has called for an Emergency Budget next month but details are more likely to be forthcoming at the next Comprehensive Spending Review, which had been due in July but has now been delayed to autumn.

The question of who foots the bill – and how – means any celebrations of today’s announcements require some caution.