Hey big spender? Rishi Sunak has announced a huge increase in public spending. “How will Labour respond?” is the question of the hour. Sunak sounds more like John McDonnell than Philip Hammond, doesn’t he?
Well, up to a point. It’s not really accurate to see this dramatic increase as a move towards the Labour Party under Jeremy Corbyn or Ed Miliband, or even Tony Blair for that matter. As far as day-to-day public spending is concerned, this Budget is much more austere than anything that would have been delivered by McDonnell or Ed Balls, and is very far from what Gordon Brown delivered too.
This Budget did something entirely new – it spent large sums on infrastructure, something that no British government has ever truly done in the democratic era. The majority of our infrastructure stems from the early 20th century or before. Although nominally Sunak has “only” brought British infrastructure spending back up to the standards of the 1950s, that underestimates the extent of the change. A lot of the United Kingdom’s immediate postwar infrastructure spending was about repairing the damage of war, rather than expanding new capacity, and building social housing (something this Budget largely does not do).
The level of ambition Sunak has shown on infrastructure doesn’t really have an analogue – McDonnell and Balls had similar ambitions, but what we think of as “austerity” – ie cuts to New Labour social programmes – is very much here to stay. This is a Budget in which cuts to public services, outside the core NHS and the police, will remain because of the government’s reluctance to contemplate major tax increases.
So what does it mean for Labour? Well, in practice, it doesn’t change very much, as talking about the condition of the public realm did not secure a Labour victory in 2015, 2017 or 2019. Some in the party may feel, however, that the shift in political expectations – and the fact that journalists are talking as if the public realm is going to experience a great level of financial largesse – is a useful change for them. But in practice, this is a change of political approach on infrastructure – not on public services.