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Where Will The Tory Budget Spending Splurge Leave The Labour Party?

By Paul Waugh

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To borrow, and to borrow, and to borrow

When Rishi Sunak gets on his feet in the House of Commons on Wednesday, try this little exercise. Close your eyes, forget which party the chancellor represents, and just listen.

£100bn for new road, rail, flood defences and broadband infrastructure; shifting 1,000 Treasury jobs to the north of England; more cash for homelessness; the scrapping of the tampon tax; a raid on the pension pots of high earners; a tax break to hire ex-servicemen; moves to ensure the elderly have access to cashpoints.

Yes, they’re all measures that could easily have been unveiled by Gordon Brown (apart from the tampon tax, perhaps, as he famously couldn’t bring himself to say the word). Having just won a big majority thanks to former Labour voters in the north and midlands, that’s not a coincidence, it’s a political strategy. “Levelling up” (copyright B Johnson) is the new “invest to save” (copyright G Brown).

It’s unclear whether Sunak will go the whole hog and signal a future hike in fuel duty (an easy cash-cow of the Brown days), and there will inevitably be some Tory rhetoric at least (expect attacks on Labour being financially illiterate and irresponsible). A ‘jobs tax’ cut could be the figleaf to Conservative backbenchers who want more traditional red meat. But overall this will be a Budget to target that former ‘Red Wall’.‌

Ahead of his big day, Sunak has tonight ‘announced’ he will be putting £100bn of infrastructure spending at the heart of his plans. In fact, that was the Tory manifesto pledge, so it would be a little bizarre if he wasn’t going to splash the cash to that extent. Still, judging by the excited headlines, it’s job done for the Treasury as far as PR goes.

And in another big win for Dominic Cummings, the Treasury ‘Green Book’ of public spending rules is being overhauled by Sunak to make it easier to back long-term projects built in the north. This has been a demand not just of northern Tories like Teesside mayor Ben Houchen, but also Labour metro mayors like Andy Burnham and independent figures like northern powerhouse chief Jim O’Neill.

And infrastructure is certainly a Boris Johnson priority. As he said during the election campaign, he is ‘instinctively’ favourable to funding big schemes such as HS2. Yes, he has a chequered history on vanity projects (Boris Buses, his Garden Bridge, his mad cable car failure), and some voters will be uneasy about living on the ‘never never’. But borrowing money at record low interest rates for long-term rebuilding puts him firmly in the mainstream centre of British politics.

Of course, the real political problem will not be infrastructure but day-to-day spending curbs to councils and social care. It’s much easier for a PM to point to big ticket projects than to reverse the death-by-a-thousand-cuts to things like youth clubs, probation, public health, Sure Starts, libraries and so on. If austerity turns out to be ‘baked in’ to Sunak’s figures, Labour could sharpen its attack lines.

It’s worth remembering too that a recession is not unlikely over the next few years, that coronavirus could still overwhelm the Johnson administration (and the Tory squeeze on NHS finances blamed for it) and that Brexit could go badly wrong if it means job losses and disruption.

However, just imagine that on all those things the government somehow gets a fair wind. If the public give a warm welcome to the massive spending splurge unveiled tomorrow, it’s not inconceivable that ‘Red Wall’ Labour voters will stay Blue and back Johnson again at the next election. And as it heads towards 20 years in office, it could pick a young new leader to make Keir Starmer look like yesterday’s man.

When the Tories come to power after Labour, they often do so on a promise to ‘clean up the mess’ of the public finances left by their predecessors. When Labour comes to power after the Tories, it’s often on a promise to spend more on the crumbling public realm. If Johnson robs the Opposition of even that key weapon (thanks to new hospitals, rail lines, roads, broadband and flood defences) come 2024, some voters will be left asking: what is Labour actually for?

Quote Of The Day

“Please stop lecturing us and saying that there is no other provider and to stop lecturing us about this somehow killing broadband roll-out”

Iain Duncan Smith warns ministers on Huawei

Tuesday Cheat Sheet

A total of 38 Tory MPs rebelled against the government over its plans to allow Huawei access to the UK’s 5G network. A further 22 Tory MPs did not vote. As a result, Johnson’s majority was slashed from 87 to just 24.

A sixth Briton died of coronavirus as the number of cases of people tested positive for the disease rose to 373, up 54 from the previous day.

Low-paid, gig economy and self-employed workers will all get financial support if they stay at home due to coronavirus, Matt Hancock has signalled.

Cabinet secretary Sir Mark Sedwill dodged questions about Priti Patel‘s conduct. He also warned against “over-defining” the ministerial code to change what constitutes bullying.

Sadiq Khan is on course for a landslide win in the London Mayoralty, according to a new YouGov/Queen Mary London poll in the Evening Standard. Khan is on 49%, Tory rival Shaun Bailey on just 24%, independent Rory Stewart on 13%.

What I’m Reading

How Trump Fuelled The US Coronavirus Outbreak – Politico

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