BORIS TO REVEAL BUDGET BOOST...
AND CARRIE SHOWS HER ENGAGEMENT RING TOO
BILLIONS FOR FLOOD DEFENCES:
CHANCELLOR Rishi Sunak is to unveil a £5.2billion package to help protect Britain’s flood-hit communities and restore public faith in politics.
Dubbed “The People’s Government Budget” – the first of Prime Minister Boris Johnson’s administration – Wednesday’s statement aims to deliver on the Conservative Party’s general election pledges.
It is also claims to “lay the foundations for a decade of growth”.
Mr Sunak’s Budget will include a pledge to ensure that income tax, VAT and National Insurance cannot be increased before the next election.
But the financial statement will be overshadowed by warnings that the Government needs to cut taxes to ensure Brexit is a success and Britain can compete on the world stage. There are also demands for Mr Sunak to stop families being penalised by the tax system.
Campaigners have warned that it is hurting households most in the former “Red Wall” Labour constituencies won by the Conservatives in December.
However, it is understood that fuel duty will again be frozen, following pressure from blue collar Tory MPS from the North and the Midlands.
And in a sign the Prime Minister wants to tackle the hardship faced by many communities, Mr Sunak will release cash to tackle problems caused by the coronavirus outbreak, as well as the longer term issues around the annual misery caused by flooding.
The £5.2billion, applied from 2021, is double the current amount spent on flood defences and will protect 336,000 homes in
England with 2,000 downpour and coastal protection schemes.
The cash injection puts the Government on track to meet the investment level recommended by independent adviser the National Infrastructure Commission and will cut England’s national flood risk by 11 per cent by 2027.
The Chancellor is also expected to announce a £120million Winter Defence Repair Fund to rebuild assets damaged during the recent storms as quickly as possible.
The fund will see 300 stormwrecked schemes brought back to full functionality.
Some previous governments have used their first Budget to change policy as it is furthest away from a general election. In 2010, then chancellor George Osborne infamously hiked VAT to 20 per cent, having previously promised he would not let it go above 17.5 per cent.
But Downing Street sources have emphasised that Mr Sunak’s Budget has been set with the firm intention to deliver on the Government’s election promises.
It will also put in place plans to start levelling up the regions and there will be an £80billion investment plan in infrastructure.
A source close to the Chancellor said: “Next week’s budget will be the manifesto budget.
“We know that in 2019 public faith in politicians hit rock bottom.
“Too many governments use
the first budget of a new parliament to break promises, not honour them.
“The People’s Government will do things differently – we will deliver on the promises we made to the British people... the ones they voted for from St Ives to Sedgefield.
“By levelling up Britain we can ensure everyone has the same chances and opportunities in life, wherever they live.”
The source said the Government would build a “better, fairer, more United Kingdom”, and invest responsibly, not through “reckless, unfunded spending”.
The insider said that 2020 marked “the start of a decade of investment in communities across the country, many of whom feel left behind”.
The source added: “On Wednesday we will lay the foundations for a decade of growth.”
But Mr Sunak was warned by leading pro-leave economists that he needs to slash taxes to make Brexit a success.
Speaking at a Bruges Group conference in London yesterday, Capital Economics chairman Roger Bootle said: “I think it’s extremely important that we send out a message to the economy, to the British people and to all those businesses that this is going to be a super-competitive economy.
“We’ve become a high tax country [and] this is pretty crazy.
“In order to be fully competitive in the world we need to reverse that trend and get taxes substantially lower.”
Professor Patrick Minford of Cardiff University, once an unofficial adviser to Margaret Thatcher, agreed. He said: “[We] need to cut taxes.
“We need to make our economy highly competitive – and that will bring us growth on top of growth we will get from Brexit itself.
“Tax cuts we make will bring in more growth and very largely pay for themselves.”
Prof Tim Congdon, an economist at the University of Buckingham, warned that the pound falling against the euro would strengthen calls to rejoin the European Union. He said:
“We must control public spending, have strong public finances. We must have not a weak currency.
“If we have that, I’m afraid we’ll again get this business of, ‘why are we inferior to the Germans?’
“Then the Remainers start to win again.”
There is also pressure on the Chancellor to help hard-pressed families caught in the tax system.
The Care charity said if the Prime Minister is to succeed in his ambition of “levelling up” regions outside London he must cut the tax burden on families.
It said: “A one-earner married couple with two children in the UK will pay 39 per cent more than the equivalent French family, three times as much as the US family and more than 10 times as much as the German family.”
Amongst countries in OECD (Organisation for Economic Co-operation and Development) the UK income tax burden is 27 per cent greater than the average for a one-earner married couple with two children.
John O’connell of the Taxpayers’ Alliance said: “People across the country are struggling under the weight of taxes.
“The tax burden is at a 50-year high and it’s high time politicians took action. The new Chancellor should use his first Budget to liberate the public from the constraints of massive taxes.”
WHEN the Chancellor Rishi Sunak gets to his feet onwednesday to deliver the first Budget of a Boris Johnson government, it will be one moment in an era of extraordinary events.
In one statement, the new Chancellor needs to set Britain on a course to maximise the benefits of Brexit as the country prepares to throw off the last shackles of the EU at the end of this year.
Even more importantly he needs to fulfil the manifesto promise of levelling up economic benefits to the different regions and begin a revival of the North of England and Midlands, where the Tories won so many new seats in the General Election.
But he also needs to provide stability for people in tough times and tackle the short-term crisis of coronavirus and the now annual and increasing misery caused by flooding.
This is no small challenge for a man who just a few weeks ago was expecting somebody else to deliver the Budget.
But Mr Sunak and, more importantly, Boris Johnson, who must be his partner in this enterprise, appear to be two men up to the task.
The revelation that cash for flood defences will finally be brought up to the necessary levels shows that this Government is not messing around any more.
It is also rightly targeting restoring public faith in politics after the shenanigans of the Remainer Parliament did so much to harm it over the past three years.
This means that the blue collar seats in the North and Midlands must have the promises made to them honoured and that there must be no more tax rises.
But we have also seen with coronavirus that under Mr Johnson we have a Government ready to act properly.
There has been an understandable desire not to create panic unnecessarily and now we are seeing plans for measures such as food delivery being put in place to cope if there is a full-blown emergency.
In the end, this week’s Budget, the levellingup agenda, the success of Brexit negotiations and the way the crises of flooding and coronavirus are dealt with will be the marks by which the Government is judged.
It is important that this administration gets off to a strong start.and so far the signs are positive.