News Reporter Adam Toms looks at Rishi Sunak’s first budget in the wake of the COVID-19 outbreak
Chancellor of the Exchequer, Rishi Sunak, unleashed monumental levels of spending – fuelled by increased borrowing – in his budget on Wednesday as the government seeks to combat the spread of coronavirus and fulfil their promise to ‘level up’ the country.
The Chancellor had only held his current post for 27 days.
With ex-Chancellor Sajid Javid ousted and the establishment of a new joint team of No. 11 and 10 economic advisors, the Johnson administration was free to announce billions upon billions of investment.
Accompanying this spending are levy reliefs which will benefit students, including the freezing of duties on alcoholic beverages after a planned increase.
Moreover, VAT on eBooks, newspapers and academic journals has been scrapped, ensuring the cheaper acquisition of learning resources in the future. This may mean a larger variety of free secondary and primary material for students to access.
The government states that ‘the Budget puts science, innovation and technology at the heart of the UK’s investment strategy’ as it has set an ‘objective of increasing economy-wide investment in R&D to 2.4% of GDP by 2027.’
The chancellor made a commitment that these funds will be distributed to universities outside of London, Oxford and Cambridge.
This rhetoric has become familiar as the government seeks to suggest that they are standing by elections promises of more equal monetary resources nationwide, not just in the south east.
Professor Markus Perkmann of Imperial College London states that this funding would ‘more than compensate for the loss of EU funding for research of which the UK is a large recipient.’
This may free up funding at the UoB and facilitate existing research projects.
Sunak’s proliferation in spending concerned Javid and ex-PM Theresa May, now the old guard, who advocated caution and continued application of fiscal rules.
After the chancellor’s speech, May said that it was ‘necessary to ensure that we have that restraint and caution that enables us to make the public finances continue to be strong into the future.’
Some experts have echoed her concerns and warned that public finances may become vulnerable after to a rise in borrowing costs due to a proliferation in spending.
Be that as it may, in one of her final speeches as PM, May stated that further education had been ‘overlooked, undervalued and underfunded.’
This investment certainly suggests a change of direction from the economic strategy of previous Tory governments to one more reminiscent of policies outlined in a Labour manifesto.
Sunak has also allocated £5bn extra for public spending and £7bn of support for households and businesses, claiming that the funds are ‘temporary, timely and targeted.’
Torsten Bell, chief executive of the Resolution Foundation thinktank, stated that: ‘Significant action to support firms affected by coronavirus is very welcome and should help ensure the temporary shock does not do them lasting damage. In contrast to significant help for firms, targeted support for families affected by coronavirus was less evident.’