Rishi Sunak's spending blizzard risks a big hangover in the years to come
RISHI Sunak yesterday popped the cork on a champagne Budget for Sun readers with a boost for pubs, draught beer and British bubbly.
The Chancellor beamed: “This is a new age of optimism.”
But his spending blizzard risks a hangover as the bills roll in over the years to come — fuelled by ever- rising inflation.
Tory MPs cheered as the Chancellor cut 3p off a pint of weak beer, sliced duty on sparkling wine and handed tax breaks to Covid-battered pubs, gyms and shops.
Mr Sunak said yesterday: “These are the biggest cuts to beer duties for 50 years. And they are only possible because we have left the European Union.”
It was party time as he handed out a pay boost for low earners, up to £190 a week extra for working families on benefits and a pay rise for six million public sector workers.
He axed a petrol duty hike — thanks to the Sun’s long-running campaign for struggling motorists — and scrapped tax rises on whisky and other spirits.
The Chancellor denied the £3billion cuts were “beer barrel politics” and cast himself as a low-spending, low-tax Chancellor.
Yet he unleashed an eye-watering £150billion state spending splurge and a leap in total taxation to its highest since Labour’s Clement Attlee in 1949.
Tory MPs found themselves cheering and waving as Mr Sunak rattled off spending pledges which could easily have been pinched from the Labour Party playbook.
He promised “world-class public services”, music to Labour ears.
And he vowed to restore overseas aid, trimmed last year to pay for pandemic spending, to 0.7 per cent of economic output, unpopular with many Tories.
🔵 Read our Budget 2021 live blog for live updates
Domestic air travellers will pay less to fly but — in a nod to the COP26 climate change summit — long-haul tourists face a discouraging increase in passenger duty.
The extra revenues will be lavished on the NHS, which now gobbles £40 out of every £100 raised from taxpayers.
The Chancellor produced some good news to justify his optimism.
The economy will grow 6.5 per cent this year and again next — much higher than predicted.
MONSTER OF INFLATION
Unemployment is also running well below expectations, cutting the cost of benefits.
Billions have been earmarked for much-needed long-term investment on roads, rail, ports and infrastructure — all part of the Tories’ “levelling-up” agenda.
Mr Sunak is hoping these will boost the economy and create elbow room for voter-friendly tax cuts before the next election.
It is a big gamble. The outcome will be determined by events far beyond his control.
The monster of inflation is on the march for the first time in 40 years. It is heading for 4.5 per cent, more than double official targets.
Every extra percentage point piles billions on to Whitehall borrowing costs. Some experts fear it will hit six to eight per cent next year, forcing up interest rates on mortgages and state debt.
Rishi Sunak’s age of optimism could be a flash in the pan.
Source: Read Full Article