Rishi to the Rescue

Rishi Sunak today delivered his second Budget as Chancellor, setting out a number of measures to support the economy as it begins to reopen in Spring following a hard Winter. However, Mr Sunak also made clear the scope of the challenge ahead as he gave a candid and, at times, uncomfortable assessment of the UK's finances. His comment that many future Governments will also shoulder the burden of the UK’s ever-increasing debt has two aims; firstly, a political message (better the devil you know) but also an attempt to pre-empt the negative messages from economic forecasters by delivering the news direct to voters and on his own terms.

There was little of the traditional Budget showmanship, with major announcements such as furlough, Stamp Duty, 5% mortgages and sector specific financial support pre-briefed over the weekend. Even the headline grabbing announcement on freeports is hardly a new idea. However, this was undeniably a political Budget, with the major announcements skewed towards the Government’s key priorities: Levelling Up, protecting the Union and making a success of Brexit and the COVID recovery. Levelling Up, in particular, was fleshed out in greater detail with confirmation of the Treasury’s new Darlington campus, the new UK Infrastructure Bank in Leeds and three new northern freeports in Teesside, Liverpool and Humberside.

Interestingly, Build Back Better (the phrase that unites both Boris Johnson and Joe Biden) was absent from the speech. Whether this signals a strategic disagreement between the Treasury and No. 10 remains to be seen. What is clear, however, is that the Chancellor’s measures are tailored to unite a broad but targeted coalition of voters, including the Red Wall, small business owners and first-time buyers. Businesses will need to consider how they frame their message through this prism to ensure they cut through when engaging with political stakeholders. 

The initial response from the media appears to be cautiously positive. However, the Chancellor still has to navigate a press conference at 5pm, before meeting with the 1922 Committee of backbench Tory MPs and finally a webinar with Conservative Party members. In reality, we will not know if this Budget has been an economic success for years to come but Mr Sunak has certainly shown a unique political elan in the face of an ongoing and seismic challenge.