New Chancellor Rishi Sunak must know a poor South won’t make the North richer
IF we believe all we read, Rishi Sunak’s first Budget will hammer rich southerners, seize their cash and spray it all over the Red Wall as a bribe to new Tory voters.
Londoners will be taxed until the pips squeak on pensions and property while their money is splurged on vanity projects across the Midlands and the North.
This surely cannot be right. Boris Johnson must know this is his one big chance for a bold and imaginative boost to the whole economy.
As a senior minister warned on Sunday: “You don’t make the North rich by making the South poor.
“Nor did the Red Wall collapse because those new Tory voters wanted more socialism.”
Sunak’s first Budget should be the single most dramatic moment of the early Johnson era, setting Brexit Britain’s course as a sovereign trading nation.
March 11, 2020, must stand comparison with the stunning Tory Budgets of Geoffrey Howe in 1981 and Nigel Lawson in 1988 — both high water marks in the fortunes of post-war Britain.
DRAMATIC MOMENT
Otherwise, what was the point of the bombshell Cabinet shake-up that toppled Sajid Javid and sent shockwaves through our mandarin-dominated Whitehall machine?
Budget Day is an unrepeatable chance to show that UK plc is open for business — and begin repairing the damage inflicted by previous Chancellors.
It’s no good saying Sunak had only four weeks to rewrite Javid’s tax and spending plans.
What is the point of a whizz-kid with all those Goldman Sachs-charged brain cells if he can’t deliver the revolution we need?
This opportunity — more or less marking Boris Johnson’s first 100 days since the election — will not come again.
If the Treasury has been doing its job, it will have drafted contingency plans for every possible challenge — tax cuts, spending leaps, higher thresholds or merging income tax with National Insurance contributions.
It will have cost-and-benefit assessments for all eventualities, from a new 40p top rate to picking cities like Liverpool, Belfast and Glasgow as job-magnet freeports.
CALLS FOR REFORM
The Treasury has a blinkered view about tax. It is a means of raising money, on a one-way ratchet.
The Treasury does not do “dynamic” economics — lowering taxes and leaving voters to splash their newly acquired cash.
This is where Sunak can earn his spurs as an innovative, daring, free-thinking Treasury boss. Stamp duty tops everyone’s calls for reform.
George Osborne’s loathed property tax hike paralysed the housing market, locked up billions in hoarded capital, destroyed job mobility — and reduced Treasury revenues.
Cutting stamp duty would instantly free up spending and boost the whole economy — especially for tradesmen and the hard-hit High Street.
Speaking of shops, business rates need drastic reform to save our shuttered town centres. Why not tax the property owners instead of their struggling tenant shop-keepers?
All these measures would boost productivity — the amount we earn as a country for every hour worked.
Ours is woeful. The average French worker produces more in four days than we do in a full week.
PROPER WAGES
Firms have learned to rely on cheap foreign labour, subsidised by taxpayers with welfare top-ups.
Home Secretary Priti Patel’s immigration shake-up will cut the flow of cheap labour and force firms to pay proper wages for low-paid care home and service industry workers.
The Chancellor can also help by reforming the Factory Tax and encouraging firms to invest in new machinery and technology — the key to economic growth.
Whatever Sunak does on March 11, his duty is to make sure Britain is braced and ready for Brexit.
Whatever he does will upset the critics. Sir Geoffrey Howe’s revolutionary 1981 Budget was denounced by 364 “top” economists in The Times.
In 1988, the SNP’s Alex Salmond was booted out of the Commons for heckling Nigel Lawson’s tax-slashing measures.
Together those controversial budgets cured Britain as the Sick Man Of Europe and began 30 years of unbroken economic growth.
We need Rishi Sunak to walk in their giant footsteps and turn Britain into the offshore economic dynamo so feared by our erstwhile European partners.
Last days of Brussels
EUROPE is the living embodiment of the emperor with no clothes.
It has bluffed its way through the past few decades by posturing as an integrated political and economic colossus.
In reality, like the Wizard Of Oz, it has concealed its naked corruption, barefaced greed and brazen incompetence behind a curtain of bluster and denial.
Britain was always there to impose reality on this world of self-delusion. Now we are heading for the exit, taking with us our £14billion a year in hard currency.
The long predicted End of Empire is about to begin.
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