Continuing a theme, we provide further coverage on last week's budget with this devastating analysis by Liam Halligan for the Telegraph. No further words are needed here. His own introduction says it all:
"Full of spending rises, barely a tax cut in sight and highly dependent on growth which may not happen, this Budget was far from prudent.
Confounding fears of a funding squeeze, Sunak pledged no less than £150 billion of extra government spending, with overall expenditure rising 3.8pc a year in real terms between now and 2024, up from the 2.5pc annual increase envisaged back in March.
As such, state spending as a share of GDP will reach its highest sustained level since before Margaret Thatcher came to power in the late 1970s.
And to pay for all that, while borrowing will rise, the overall tax burden, says the independent Office of Budget Responsibility, will be higher than at any time since Clement Attlee’s post-War Labour government in the late 1940s."
The reasons for our current predicament are obvious and well-known:
"Eighteen months of on-again-off-again anti-Covid restrictions have left Britain in a fiscal hole. Spending on furlough and other support measures has soared since March 2020, as our locked-down economy struggled to generate cash."
That’s why the Government borrowed an astonishing £320bn last year – around 15pc of GDP, again the highest figure since World War Two. During 2021, we’re looking at another £183bn of borrowing – another huge increase in the UK’s national debt."
Yet this government appears to want to double-down on state largesse with even greater sums including of course for the NHS:
"The Chancellor threw another £6bn at the National Health Service on Wednesday, just weeks after announcing an additional £36bn of funding over the next three years. The growth in the NHS budget over recent years has been astonishing."
Even Paul Johnson, director of the Institute of Fiscal Studies and an impeccably apolitical source admits to the scale of what's going on: "This really is a big-taxing, big-spending government. Sunak’s plans are more similar to Gordon Brown’s than George Osborne’s."
And as history proves, more money makes no difference to the performance of an organisation if its underlying structures remain fundamentally obsolete. The NHS is no exception.
"We can only improve the NHS – getting more and better healthcare for the huge sums we spend on it – if we stop deifying this complex institution. Instead of pretending weaknesses and inefficiencies don’t exist (or are only due to insufficient funding), such shortcomings should be vigorously addressed."
To cap it all, these huge spending commitments are dependent on the UK economy expanding by 6.5% this year rather than 4% as forecast back in March and by another 6% in 2022. What guarantees do we have of that?
"Full of spending rises, barely a tax cut in sight and highly dependent on growth which may not happen, this Budget was far from prudent."
Risky Rishi seems to be betting the house...
The full article can be read here with a link to the original beneath it:
Rishi Sunak Autumn 2021