This week saw the announcement of the spring budget, as the government set out a series of measures that it hopes will support the UK economy as it looks to recover from the COVID-19 crisis. The chancellor’s plan aims to boost business and investment in the short-term and balance the books through increased taxation in the longer term, in what pundits have called a “spend now, tax later” strategy.
As if that wasn’t enough to keep us occupied, this week we have also seen a Holyrood inquiry heat-up, an EU bust-up and the government settle-up for Priti Patel but not cough-up for NHS workers. Luckily for you, we have pulled together the four things you need to know from another restless week in the world of politics.
A not-so-healthy budget
On Wednesday, the chancellor delivered the 2021 budget. Announcing his second budget since taking the post, Rishi Sunak had the arduous task of trying to protect jobs and support businesses through the pandemic, without abandoning conservative fiscal principles of reduced borrowing and lower taxation.
In the lead-up to the chancellor’s speech all eyes were on taxation, with rumours of potential tax hikes stirring murmurs of a backbench Tory rebellion. However, the chancellor seems to have appeased his Conservative colleagues, having apparently earned a cheer from the notorious 1922 Committee on Wednesday night. Sunak’s announcement of no rises in VAT, income tax or national insurance, personal tax thresholds increasing next year to £12,570 and then remaining frozen until 2026 and corporate tax increasing to 25% from April 2023, have mostly been well received. In fact, given that rises will leave Britain with a tax burden of 35% of GDP by 2025-26, the chancellor’s plan has been received remarkably well by his backbenches and the wider public.
That said, the chancellor has emerged far from unscathed from this week’s budget broadcast. Since the speech was delivered, a number of prominent economists from organisations such as the Resolution Foundation and the Office for Budget Responsibility have challenged the government’s medium-term estimates for public spending. The Institute for Fiscal Studies has even dubbed the spending plans after 2021-2022 as “implausibly low”, given the pressures on the public sector.
Furthermore, political opponents have labelled the government’s regional investment plans ‘pork barrel politics’. The budget outlines 45 new Towns Deals, the first round of the levelling up fund and a new northern hub for the Treasury. These measures have since faced scrutiny, as Labour leaders have highlighted that no less than 47 of the 56 constituencies covered by the Towns Deals are Conservative seats, including 14 Tory constituencies gained in the 2019 election. In addition, commentators have been quick to point out that the new Treasury site in Darlington will sit in the chancellor’s neighbouring constituency, with five cabinet minsters’ constituencies being awarded the highest priority rating for towns funding. The prime minister has of course defended the allocations as “completely impartial” and based on clear criteria, but he has not yet managed to clear the water of accusations of “fishy” funding decisions.
In addition, one of the biggest criticisms of the budget has not come from what was included, but what was not. A large number of cross-party MPs, think tanks and stakeholders have shared their dismay at the striking lack of attention given to health and social care provision in the budget. Amongst others, former health secretary and chair of the health and social select committee, Rt Hon Jeremy Hunt, has described his disappointment that the budget did not address social care. Moreover, another key sticking point on health is that total funding for the Department of Health and Social Care (DHSC) is due to fall from £199.2bn in 2020/21 to £169.1bn next year. Whilst the government has suggested this is due to a reduced need in emergency funding to fight the pandemic, stakeholder concerns remain about whether this takes into consideration the current backlog and the long term toll the crisis has taken on the health service.
Pitiful pay
Unfortunately for the PM, yesterday’s news of a proposed 1% pay rise in 2021-22 for NHS staff in England is only set to heighten accusations that the government is not prioritising funding for the health service. Criticism of the proposed increase is already coming in thick and fast from professional bodies, with the Royal College of Nurses branding the plans “pitiful and bitterly disappointing”, and the British Medical Association describing them as a “total dereliction of the government’s moral duty”. Furthermore, Unite, a leading union for health staff, has threatened to hold an industrial action ballot in response to the government’s “kick-in-the-teeth” announcement that they say shows “an unyielding contempt by ministers for those who have done so much to care for tens of thousands of COVID-19 patients in the last year”. Ouch.
These are not the health headlines that the government had hoped for this week. The unveiling of £79 million in funding for mental health support for children and young people, and £100 million in funding for weight management, have unfortunately fallen by the wayside.
At a time where health is at the forefront of the political agenda more than ever, the prime minister will need to manoeuvre messaging back to his key health commitments and weather the storm of the fallout from the funding plans. As challenges swell around the treatment of COVID’s health heroes, and the budget undergoes surgical examination over the weekend, the prime minister and his team will need to be on top form to see off the growing health-related backlash.
Ministerial misconduct
Away from Westminster, Nicola Sturgeon faced a challenging day of her own on Wednesday, as she took part in an eight hour evidence session for the inquiry into her government's handling of harassment complaints against her predecessor, Alex Salmond. During the session, the first minister answered grilling questions around accusations that she broke ministerial code, lied to the Scottish parliament and conspired to have Mr Salmond imprisoned.
The session was hugely significant for the reputation of the first minister, especially ahead of the Scottish elections in May. Yet she seemed to keep her cool as she delivered her responses and manoeuvred through questions with expert precision. Whilst giving her evidence however, Nicola Sturgeon did admit to a single but serious failure: the disastrous attempt to defend the government’s complaints process against a Salmond challenge in the civil courts, which cost the Scottish government more than £500,000. Overall, the first minister’s performance has led most commentators to believe that this is not the smoking gun that will remove her from office. But there are still tough days to come, with a separate inquiry by QC James Hamilton into whether Sturgeon breached the ministerial code, and the Scottish Tories’ planned vote of no confidence expected next week.
As if that wasn’t enough scandal for one week, yesterday news also broke that the government has agreed a £340,000 settlement with civil servant Sir Philip Rutnam over his claims of unfair dismissal from the Home Office. Sir Philip launched a case of constructive dismissal against the government in February last year, naming home secretary Priti Patel as being embroiled in the bullying campaign that led to his departure. While the prime minister and home secretary hope the settlement will begin to push this thorny issue under the rug, it’s fair to say that we can expect some media backlash today, with more scrutiny still to come due to the impending FDA union judicial review over Johnson’s decision to clear Patel of bullying under the ministerial code.
Goodwill hunting
Tensions between the UK and EU over the Northern Ireland protocol have also persisted this week, as the UK government issued an official-level notification to the EU that they will be unilaterally extending grace periods for Irish Sea border checks to October. European Commission vice president, Maroš Šefcovic, said the move amounted to "a violation of the relevant substantive provisions" of the Brexit deal and that the EU would respond in accordance with the "legal means" established by the protocol and the wider deal.
Boris Johnson has since suggested that “goodwill and common sense” can solve the Northern Ireland border problems; however, goodwill in particular may be hard to come by. The replacement of Michael Gove with Lord Frost as minister responsible for taking forward our relationship with the EU has been rumoured to signal a more hard-line approach from the UK and a risk of dwindling goodwill between the two sides.
It seems the EU will also be pushing back, as reports emerge today of the European parliament postponing a decision on when to ratify the EU-UK free trade agreement, in protest of the unilateral moves by the UK. The European parliament was expected to finally ratify the treaty on 24 March, but according to sources the parliament has decided to delay a decision on when to ratify the agreement in light of recent events. As tensions increase and trust wavers, the coming weeks are set to be key in consolidating the collaborative ‘friendship’ the prime minister so happily announced on Christmas Eve.
What’s next?
As examinations of the budget continue and news lands of the minimal NHS pay increase, we can expect to see further commentary and criticism of government spending plans over the coming week. Issues around the Northern Ireland protocol however seem to be a likely hot topic for the foreseeable future, as both sides attempt to find a workable solution.
As we look further ahead to the May elections, we can also expect to hear more about mayoral candidates and elections in the devolved nations. Sadiq Khan has already launched his mayoral re-election campaign, focusing on jobs and calling for a post-war-style recovery package of investment in the capital. All in all, although spring is very much in the air, be warned that the Whitehall whirlwind rages on.