Budget and Spending Review 2021: Rishi Sunak – the revolutionary optimist?
In the run-up to the Autumn Budget, the expectation was that expenditure tramlines had already been marked out by the earlier promises made to protect funding for defence, education and health service budgets.
The view was that the purpose of all the advance press briefing, a litany on everything from pocket parks to more bus services in county areas to trams and trains in urban metro areas, was all so much glitz and glitter to mask continued cuts in unprotected areas.
The usual loser’s club, local government, criminal justice and the rest.
Instead – and here, recent watching of the BBC documentary on the Blair-Brown years pays dividends – it is more redolent of early New Labour than the tactical orchestrations of the Cameron and Osborne years.
With its call on extra youth clubs, football pitches and all that jazz, it is certainly no echo of Geoffrey Howe’s 1979 budget calling to “roll back the boundaries of the public sector”.
On the face of it, this immediately looks like the most favourable budget/spending review for a decade.
The initial take on the chancellor’s statement has to lead with the unexpectedly large increase in day-to-day revenue expenditure, an increase of £150bn (3.8% in real terms) to departmental budgets over parliament.
For local government, the work starts now in poring over the Treasury Red Book and supporting documents to see how the announcement might translate to in future local government financial settlements, in an environment of increased staff wages and rising national insurance costs.
In particular, after the lost decade of the 2010s, officers will be examining how this new money affects the trajectory of council spending power over the next decade for the delivery of popular, everyday public services from bin collection and road maintenance and what this means for locally-funding children and adult’s social care.
Sunak’s ‘age of optimism’ slogan is is shorthand for a focus on increasing growth to cut down public debt and raise living standards across the country.
Seen as more of a political statement than an economic case, it reads as a statement to set up the battlefield over which the next general election will be fought.
Whether the age of optimism can survive to the end of the current parliament, let alone the one beyond the next election, one is tempted to resort to the patron saint of hack journalists and mystical localists, GK Chesterton.
In his 1904 novel The Napoleon of Notting Hill – a fable in which intra-London borough medieval style feuding – Chesterton asserted the optimist is the true revolutionary.
He gave as his reason the sense “pessimism appeals to the weaker side of everybody, and the pessimist, therefore, drives as roaring a trade as the publican”.
So in this sense, Sunak emerges from today as a neo-Keynesian, cheerful-hearted revolutionary.
It shouldn’t go without notice that in their deliberations, the Treasury greatly benefitted from the September ministerial reshuffle, with senior officials basking in the absence of dubious pet projects backed by secretaries of state.
But alongside Sunak’s statements today, and the various publications from the Treasury and the Office for Budgetary Responsibility, we will not be seeing the publication of the Levelling Up White Paper until Michael Gove has had the chance to see if his new department can bring consistency from beginning to end on this agenda.
There is here chance to be optimistic – whether in a guarded or revolutionary sense.
Local government as a necessary engine with a meaningful role for achieving the ambitions of levelling up on the ground is still on the cards.
Alongside the litany of key constituencies namechecked by the chancellor in his Budget statement, the capital financing of improving infrastructure – digital, physical or social – is another skein to be studied.
If ‘Levelling Up’ is to run as a golden thread through the Exchequer’s strategic public finance settlement, there will be a need to unpick locally the individual strands from the likes of the £1.7bn Levelling Up Fund and UK Shared Prosperity Fund to see how much cloth there is to be cut to restore pride in the places people call home.
This portends more of the same ‘tournament financing’ which binds senior local government officers as full-time bidders for pots.
A small final note about housing.
It may not be coincidental that the second part of Nicholas Timmins’s magisterial biography of the welfare state, covering the pivotal years of 1942 to 1951 is also entitled “The Age of Optimism.’
In this section, Timmins concludes that ultimately the Conservatives, first in opposition and then in power, were moving at the pace of the social democratic ideas embodied in the services and institutions of the welfare state.
But having derided Atlee’s Labour Party for failing to build back to the level of 300,000 homes a year in the pre-war years, with the party and Churchill returned to power, restive attendees of the 1950 Conservative Party Conference demanded a concrete target be set.
They started to chant, “Three hundred thousand!”.
The party chairman, Lord Woolton asked Conservative policy supremo, RAB Butler, “Could we build 300,000?” to which Butler replied “The question is should we?”
Approval would set in motion Harold Macmillan’s great challenge by the middle of that decade.
In promising to unlock funding and land opportunities to build one million homes today, among other key pledges Sunak is setting up promises and achievements that ring magnificently when seen or heard politically.
The question is will this investment, in housing or other spheres, deliver good and clean growth?
Will the framework to support our long-term plan for growth make this money pay dividends?
Or, like the 1950s, will the economic strain of meeting today’s promises put a hard squeeze on national resources by the time of the next parliament?
This may well be the more pessimistic obverse to today’s pronouncements.
Jonathan Werran is chief executive, Localis