Good morning. Budget day is always an exciting moment at Westminster, but one of several unusual characteristics of today’s statement is that Rishi Sunak will be delivering it several weeks after announcing by far its biggest fiscal component. The £12bn a year health and social care levy unveiled in September was almost certainly more significant than any of the single tax measures we will hear today.
Another feature of this budget is that it was proceeded by an unprecedented amount of pre-briefing by the Treasury. We have had 19 press releases already about what it will contain.
So, what is going to make the statement we’re getting this afternoon significant, or memorable? There are probably two aspects that will stand out.
First, don’t despair, there will be news. This is a spending review, as well as a budget, and that means we will learn much more about departmental spending than we do in a normal budget. Also, for presentation reasons, the chancellor is going to want to have the usual surprise for MPs, and for the country, at the end of his speech. There is a lot of speculation this morning about quite what it will be, and on the Today programme Andy Burnham, the Labour mayor of Greater Manchester, suggested it could come in the form of a U-turn on the £20-per-week universal credit cut.
Second, as or more important than the multiple announcements on tax and spending will be the overall story that Sunak seeks to tell the country. He delivered his first budget in March 2020, but within a week he effectively had to tear it up because of the Covid pandemic and ever since his chancellorship has been dominated by dealing with that crisis. This will be the first budget he has written not dominated by Covid, and looking ahead to a more normal economic environment. It will be a moment of definition. Sunak presents himself as a fiscal conservative, with a picture of Nigel Lawson on display in the study. But he works for a prime minister whose economic model is more tooth fairy than Milton Friedman, and so the budget will have to resolve those tensions.
As Rowena Mason reports in her overnight preview, Sunak will accommodate Boris Johnson’s innate boosterism in his speech by declaring that we are in an age of optimism. Sunak will say:
Today’s budget begins the work of preparing for a new economy post Covid.
An economy of higher wages, higher skills, and rising productivity.
Of strong public services, vibrant communities and safer streets.
An economy fit for a new age of optimism.
That is the stronger economy of the future.
For millions of people facing rising living costs, it may feel more like anything but.
The cabinet met at 8.30am this morning, and Sunak is briefing his colleagues on the budget. Here is the agenda for the day.
12pm: Boris Johnson faces Sir Keir Starmer at PMQs.
12.30pm: Rishi Sunak delivers the budget.
1.30pm: Office for Budget Responsibility publishes the October 2021 Economic and fiscal outlook
2.30pm BST: Richard Hughes, chair of the Office for Budget Responsibility, holds a briefing about the OBR budget forecasts.
I will be writing the blog all day with my colleague, Graeme Wearden. We will be covering the build-up to the speech, the statement itself, and then focusing on reaction and analysis, and in particular trying to identify the small-print surprises that Sunak may have glossed over.