The coronavirus is putting politics on hold. The Budget, as I say in this week’s magazine, will be a much less dramatic event because of it. Given the level of economic uncertainty the virus is creating, it would be sensible to wait for the autumn Budget — when the situation should be clearer — before making big, fiscal policy decisions.
The Budget, as a consequence of this, will largely be about ‘delivering’ on the Tories’ manifesto commitments. In Downing Street they know that trust is a huge issue for both the government and Boris Johnson personally, so they want to show that they are keeping their promises.
Given that the government’s net zero by 2050 target is almost as big an undertaking as Brexit, it is worth noting that both Sunak and Johnson are tech-greens: they believe in clean tech, not hair-shirting. They think the way to achieve net zero is through innovation, rather than attempting to return to some pre-industrial age. Both calculate that there are economic opportunities in shifting to new, more environmentally friendly forms of transport and production. They point to Britain’s track record: our carbon emissions fell by 29 per cent over the past decade, faster than any other developed country. Tech, rather than rationing, led this change.
The question for the government is whether they can succeed in fostering a new, innovation-led economy. They will have to show that levelling-up isn’t a plan to tax London and the south east more to pay for increased public spending in the rest of the country, but a genuine strategy for a regional renaissance.