Rishi Sunak’s Spending Spree – the Good and the Bad
One of the main ways that the British economy has kept afloat during the coronavirus lockdown has been, of course, the furlough and extended spending schemes that Chancellor Rishi Sunak has conducted. This isn’t a huge surprise of course – the economy needed to be kept stable somehow, and even before this, the government were promising to increase spending after a decade of shall we say questionable austerity measures.
But what have been the advantages and disadvantages of this? Well, for the former, it has kept our economy stablewhen most weren’t working, and allowed the people to survive without a full time income for the time being. It also provided many businesses with the economic lifeline that they needed after the initial lockdown, and kept the British economy afloat overall. The high street, already heavily struggling as it is in this digital age, would have possibly died on its feet without the aid, and if Sunak decides to bring in an online sales tax – advocated by people as diverse as Labour MP Clive Betts and Sports Direct CEO Mike Ashley – it can only help matters.
Meanwhile, some of the government’s schemes have worked very well; their Eat Out To Help Out scheme has undoubtedly been a very fun thing to use to the many that have done so (including the author of this article), and have kept the hospitality industry going through the last few months, not to mention served some hungry bellies very well. The Kickstart scheme is also a good thing; aiding many younger people affected by the lack of employment during the coronavirus crisis, and allowing them to develop for future work and education. So that’s the good things.
However, there are still a lot of questions to be answered about both how much it costs overall, and how it’ll be paid back. Yes, spending more is good and necessary, but when we do so without any idea about how to pay it back, it becomes a major problem. The national debt currently stands at more than £2 trillion, no thanks in part to this extra spending. While many don’t care for that, it seriously matters; it reflects the financial health of the country and if we go insolvent, there won’t be any money left to pay for the public services we enjoy. As many have noted, this could lead us into a worse situation for the health of the country than the coronavirus ever threatened; how are we going to pay for high British health standards and regulations, let alone the NHS, if the economy is in the toilet?
And some of the furlough could have been rolled out a bit sooner for the most vulnerable; the self-employed and smaller businesses. The late rollout’s effect on many people in that bracket wasn’t exactly meagre; some reported that they felt that the government had told them to simply ‘drop dead’. Yikes. And at this point, while there is much noise, there doesn’t seem to be much in the way of ideas of how to combat the increasing strain of Britain’s finances, at least long term. This is somewhat understandable; the lockdown and its effects were sudden but the lack of any contingency plan is a bad thing, especially since it’ll be younger voters – a demographic heavily lost to the Conservative Party – who will foot the bill for the next few decades.
So what can be done to fill the large gaping hole in Britain’s finances? If the British public don’t want a return to austerity, that’s understandable; there are other methods could be used. Cutting in some areas would be a good start, and can be extremely popular. Scrapping the gigantic vanity project of HS2 that has so far spent £106 billion to no avail would be good, especially since the only beneficiaries are rich types who will simply get to London quicker and the majority of the public won’t feel the strain, especially since Grant Shapps’ planned return of the railroad tracks destroyed by Beeching in the 1960s make HS2 obsolete. The proposed scrapping of foreign aid is a wonderful idea too; it stops us wasting taxpayers’ hard-earned money at best rich countries who can afford the cost anyway, and at worst corrupt dictatorships who couldn’t care less about helping their own, and it allows us to spend it on our own people first.
It clearly isn’t fair to pay to keep other children well if your own are malnourished, so this is a great step, if it ever comes to light that is. Meanwhile, the proposed increases of taxes for the rich and corporations are a step in the right direction as well, given that they often in the past haven’t paid their fair share, while others simply dodge it altogether. Implementing higher taxes on that bracket shall avoid much of the public having to foot the bill, all the while it would be an incredibly popular move, especially if the government tries to close tax loopholes next.
And also, if Boris really wants to connect and build up Britain, a return to being self-reliant would be a good start, especially in industry and manufacturing. If the coronavirus crisis has proved anything, it is that we can’t be reliant on other countries to develop important technology and goods, especially when in the case of China, they’ve shown that they can’t be trusted to return the favour. Yes, it may please the free market ideologues and international elites to have cheaper goods, but it does nothing for the host nation; the deindustrialisation of this country has been a travestyover the years, and the transformation to a more gig economy in those areas doesn’t help matters.
That’s not even taking into consideration the youth there who have no prospect of tomorrow; whereas their forefathers built strong working and middle class families based on industry and well-paying jobs, the next few generations’ only hope of getting into the middle class is at best becoming famous on social media on sites like YouTube or Instagram, or at worst accepting the increasingly badly-paid zero hours contracts jobs, all the while their communities continue to die around them. American paleoconservative commentator Patrick J. Buchanan warned that due to this focus on free trade, his country would come to the point where ‘the industrial evisceration of the United States will continue until we make nothing the world wants but Hollywood movies’, something even Britain can no longer offer.
If Britain is to survive at all economically, this move must be considered. President Donald Trump, for all his faults, won much of the rustbelt in his country based on a promise to bring back manufacturing and protect American industry, both of which he’s largely delivered on, especially with his policy on trade tariffs. Boris needs to follow suit; bring back manufacturing and industry, all the while protect our own with a tariff. It may not make Britain the economic powerhouse it once was, but it isn’t the point. We need to be self-reliant again, otherwise we risk losing ourselves to a global marketplace, many of whose biggest players are often self-reliant any way. For inspiration, he could start with a recent report by the entrepreneur John Mills titled ‘Manufacturing a recovery from Coronavirus’ that could give some inspiration for what we could do in the future, especially with improving manufacturing at home, all the while not relying on the global economy so much.
Those are some suggestions, and hopefully Sunak and his team can come up with a coherent solution that will somewhat balance the books and keep Britain strong economically. After all, as Milton Friedman stated, ‘there ain’t no such thing as a free lunch’, and the time to pay our bills will be fast approaching. If cool heads prevail at the Treasury, and a Harold Macmillan moment can be avoided, things should be plain sailing in the near future.
Edward Howard
"Rishi Sunak MP - hi-res" by Ministry of Housing, Communities and Local Govt is licensed under CC BY-ND 2.0