Rishi’s tax-and-spend gamble on recovery

IT IS probably just as well that, as a teetotaller, Rishi Sunak was unable to follow the long tradition of Chancellors enjoying a glass of whisky while delivering their Budget.

Given the terrifying economic news he had to report, he might otherwise have been tempted to reach for a very large one indeed. The most calamitous fall in national income for 300 years. More than £400billion spent on Covid support measures so far. Public borrowing of another £234billion next year. National debt at £2.14trillion.

Mr Sunak’s mission yesterday was to provide a Budget which would get Britain moving again and give some idea how we might one day balance the books, while at the same time protecting jobs and businesses. As usual, it was a smooth and engaging performance. Mr Sunak is able to make his audience like him.

We will see whether that still holds when he stops giving away money.

However, it was plain yesterday that that time hasn’t arrived yet. He shelled out another £65billion in extended furlough, grants for the self-employed, more VAT discounts and business rate holidays.

But there were Budget tax bombshells. The first was a four-year freeze in thresholds, which will bring an extra one million people into taxation and 1.3million more into the higher band.

The second was even more of a shock – a massive hike in corporation tax from 19 to 25 per cent.

We do, however, understand that Mr Sunak has an unenviable juggling act to perform and in many respects this was a dexterous and politically astute Budget.

And amid all the gloomy numbers, there are some green shoots of optimism.

The economic recovery is expected to be swifter and more sustained, so that we should be back to pre-crisis levels by the middle of next year.

But that depends on lifting restrictions. Left too long, the ‘coiled spring’ of the British economy will go to rust. As these Budget figures show, every day counts.