Budget 2021: A Shift in Tory Philosophy.
The BBC are reporting that a shift in Tory philosophy during Wednesday’s Budget, which saw tax and spending rise to record levels, represents a major shift in Tory’s philosophy, a minister has claimed. The party has traditionally tried to cut taxes and keep spending down.
Treasury Secretary Simon Clarke said it was still committed to low taxes but made “no apologies” for increasing public spending.
Rishi Sunak told MPs the higher tax burden is down to the “unprecedented crisis” of the pandemic. But the chancellor also turned on the spending taps in his Budget, after being widely expected to make cuts to in many government departments to help pay down the deficit.
He committed to spending increases of £150bn over three years, including nearly £2bn to help schools in England catch up following coronavirus, £6bn to tackle NHS backlogs and £7bn for transport projects.
The Institute for Fiscal Studies think tank said the spending plans were “more similar” to those of the Labour governments in the 2000s than those of George Osborne – a former Conservative chancellor.
Mr Clarke told BBC Newsnight: “The chancellor was very open about the fact that this is something of a philosophical shift. What we want to see is to get the economy turbocharged, unlock productivity, and to deliver growth more evenly across UK. That does require some upfront spending.”
Mr Sunak has sought to calm the fears of some Conservative MPs that the party has abandoned its core economic principles.
“Taxes are rising to their highest level as a percentage of GDP since the 1950s – I don’t like it, but I cannot apologise for it – it’s the result of the unprecedented crisis,” he said in his Budget speech. But now, we have a choice,” he said, adding “do we want to live in a country where the response to every question is: “what is the government going to do about it?”
“Or do we choose to recognise that government has limits, that government should have limits.”
He later insisted to ITV’s Robert Peston that this was not “empty rhetoric”, adding that both he and the prime minister wanted to deliver lower taxes by the end of the Parliament. He also told a meeting of backbench Conservative MPs on Wednesday night that “in the future every marginal pound should be put into lowering taxes”.
Labour’s shadow chancellor Rachel Reeves told ITV News that it was important to raise money “but not in the way the government is doing it”. She said the government was introducing big taxes but said “those taxes are not falling on the banks – bankers got a tax cut” in reference to a 5% cut in the surcharge levied on banks’ profits.
She added that Labour would raise taxes on “online giants who aren’t paying their fair share”.