Rishi Sunak announced a £30bn stimulus package – £12bn to combat any demand shock from Covid-19, with the remainder for planned fiscal loosening. It was the first major public demonstration of why Sunak is held in high esteem by so many of his colleagues.
Was it the budget that John McDonnell would have delivered? Not really. This was a budget that did radically different things to previous chancellors, Labour and Conservative, in terms of ambitious infrastructure announcements.
No chancellor in the democratic era has spent quite so much so quickly on infrastructure. Even in the 1950s, which is the last time the percentage figures were equivalent, the comparison doesn’t quite work because much of that was postwar reconstruction of existing infrastructure (which this government, thankfully, doesn’t have to do), and the remainder was social housing (which, regrettably, this government hasn’t done very much of).
Is this the end of austerity? Not as we commonly understand it. The cuts to New Labour era social programmes will remain in place and outside of those big election promises on the NHS, the police and education, the reality is of continuing cuts across the rest of the public realm.
This wasn’t Corbynomics: it was the budget George Osborne would have given in 2013 and 2014 had he believed that the era of low-interest rates was here to stay. Sunak’s budget means the Conservative Party is making two big gambles. The first is that you can fix the problems of the NHS solely by increasing funding for the NHS while the rest of the public realm feels the pinch. The second is that the age of cheap money really is the new normal – and that large increases in borrowing won’t have negative consequences elsewhere.
And that’s the biggest way that this budget is like the one John McDonnell would have given: not in its content, but because at the heart of this Conservative government is a big economic experiment, the results of which are unknown.