Chancellor Rishi Sunak has defended splurging the cash in his budget as he vowed to “do what it takes” to steer the UK economy through the impact of the coronavirus pandemic.
With £12bn to be spent on an immediate response to COVID-19 – as well as £18bn in other spending pledges – Mr Sunak’s first budget has been described as the biggest Treasury giveaway for nearly 30 years.
The chancellor’s plans are estimated to add £100bn to public borrowing by 2024, but Mr Sunak denied allowing free rein on Whitehall spending after a decade of austerity.
He told Sky News’ Kay Burley@Breakfast show: “It’s because of the decisions we’ve made over the last few years that our public finances are in a good position; that the foundations of our economy are strong; and that I was able yesterday to say I would do what it takes to help get our economy through the immediate challenges of coronavirus.”
There were some signs of disquiet among Conservative MPs – including former prime minister Theresa May and ex-chancellor Sajid Javid – over Wednesday’s spend-heavy budget.
But Mr Sunak highlighted how he has stuck to the fiscal rules set out in the Conservatives’ general election manifesto, which were drawn up by his predecessor Mr Javid.
The Tories promised not to borrow to fund day-to-day spending, and that debt would be lower at the end of this parliament, in 2024.
Mr Sunak said he had met both of these commitments in his first budget, although he has promised a review of the fiscal rules later in the year.
However, the chancellor did not deny that his “bold and comprehensive package” to deal with the immediate impact of coronavirus is to be fuelled by increased borrowing.
“We still have very responsible management of the public finances,” he said.
“If you look at what the projections show, they show that we have stayed within the fiscal rules that we set out in our manifesto – and yesterday’s budget was about delivering on our policies – which means we absolutely don’t borrow for spending on a day-to-day spending on a forward basis.
“And we do take advantage of the very low interest rates we’re seeing at the moment to borrow to invest in things like infrastructure; whether that’s road, rail or broadband.”
Labour shadow chancellor John McDonnell was supportive of Mr Sunak’s response to the coronavirus outbreak.
He claimed Tory MPs would have been “jumping up and down” if he had announced a giveaway budget such as Mr Sunak’s, although, he added, he would have overseen a “much bigger programme” if he had been in power.
“Everything that we’ve been saying over the last 10 years – that austerity will not solve our economic problems – regrettably have been proved right,” Mr McDonnell told Kay Burley@Breakfast.
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