The hedge-fund Chancellor knows how to grab the front-pages. £10 per head for a meal out, but only in August, and only on Monday-Wednesday, is novel. The Rishi-burger is indicative of the kind of gimmicky, short-term, consumption-heavy and corporate-subsidy laden approach of the Chancellor’s announcement. As The Guardian’s economics commentator Aditya Chakrabortty pointed out, it’s remarkable that the government dragged its heels over £120 million for free school meals over the summer, only to happily splash £500 million on half-price Nandos. That speaks to the sort of priorities motivating the Tory conversion to big state intervention.
As researcher Christine Berry has argued, the debate is no longer about whether the state intervenes or not, it’s “in whose interests, and for what purpose”. Making the first £500,000 of property sales tax-free will not build anything, it won’t create one new job, it is simply a gift to the banks, property developers, estate agents and those who already have properties, pushing up prices, making it harder for new buyers and increasing inequality. The Kick-Start scheme to tackle youth unemployment almost appears designed to generate poorly paid, temporary work, as it provides a subsidy to corporations to take on young people for 25 hours a week, at the minimum wage, and for just six months. Remember, if you are 16-18 years old the minimum wage is only £4.55 an hour. And the £1,000 bonus for keeping on staff from October to January who have been furloughed is likely to be taken up by those firms who were planning to keep them on anyway, as it is the equivalent of a fairly small tax subsidy for doing so. As Richard Murphy has argued, there is “no big idea” behind any of this.
A little credit is due for a serious investment in home insulation, which should create jobs, reduce heating emissions and energy bills all at the same time, but there was nothing in here for renewable energy generation, nothing for tree-planting and biodiversity restoration, with the UK looking like the odd-country out in Europe so far when it comes to committing serious recovery funds to decarbonisation.
“This was not a recovery statement, let alone a green one,” Ed Matthew of E3G said. “It was an economic intervention to keep people spending money and save existing jobs once people come off furlough.”
And what about Scotland? There is a dispute about how much money the Scottish Government is going to get from this in Barnett Consequentials, with quite a lot of the sums tied to specific projects or money diverted from elsewhere. Scottish Finance Secretary Kate Forbes claims it will be as little as £21 million, a long way short of the £800 million which would be due if it was all new Barnett-ised spending. Forbes will make a statement to Holyrood today about the statement, and will likely go through in meticulous detail just exactly how little of Sunak’s plans is dripping its way through to Scottish Parliament coffers. A good question for Forbes would be what would she do differently if the Scottish Government got the full £800 million? It’s one thing to want more public funds to spend for different Scottish priorities, it’s another thing to be able to outline exactly what those different priorities are.
It’s highly possible that Sunak will be back at the despatch box before long announcing more emergency funding to cope with a second outbreak. An A&E ward in Boris Johnson’s constituency has just had to close with 70 staff self-isolating. Your Rishi-burger in August might not look so appetising with a side salad of infection. If you think these people look like they know what they are doing, just remember they were brought up to bluff with confidence.
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