What the commentators said
Budgets are about politics as much as economics, said Polly Toynbee in The Guardian. And on this front, Sunak is in a strong position. The Government is benefiting from a “vaccine bounce” in the polls, and the confident Chancellor – whose PR machine has been “churning out flattering videos” of him – has the world at his feet. He won’t for long, though. Two postlockdown risks in particular should concern him, said Liam Halligan in The Sun. One is a potential rise in the interest rate the Government has to pay on its borrowing: each percentage point would add an extra £25bn a year to the debt interest bill. The other is unemployment. It now stands at 1.7 million, but if just a third of furloughed workers end up losing their jobs, it will “soar well over three million – to levels that convulsed British politics during the 1980s”.
Public attitudes have changed a lot in the past decade, said James Johnson in The Guardian. In December 2009, a YouGov poll showed that 52% of people favoured spending cuts to tackle the deficit, while 30% favoured tax rises. By last year, that had reversed, with only 27% choosing spending cuts and 47% preferring tax rises. There is “a new consensus up for grabs” here, if Sunak or his political opponents are brave enough to seize it. Whatever voters claim in polls, they don’t always reward chancellors for honesty, said Philip Johnston in The Daily Telegraph. Norman Lamont learnt that to his cost after he introduced the fuel tax escalator and other tax rises in the 1993 Budget to bring public finances under control. It went down like a lead balloon, and he was out of his job a few months later.
The important thing is that the Government remains “nimble and responsive to changes in economic circumstances over the next year”, said Warwick Lightfoot on Conservative Home. The reality behind the Budget is that we are “effectively flying blind” in this crisis. The dramatic swings in our GDP over the past year, together with the unprecedented government interventions, make it hard to make any firm economic predictions. We simply don’t know how strong the recovery will be, or how much of their accrued savings consumers will spend.