Budget 2021 live: ‘many to face living standards squeeze’ despite Sunak spending pledges | Politics

The chancellor recanted on the Conservatives’ 11-year experiment to shrink the size of the state, concluding that running public services on a shoestring is no longer compatible with winning elections.

However the £30bn exchequer cost of Brexit each year has forced the chancellor to choose between respectably-funded public services and keeping taxes low. Sadly that’s one legacy of the past 11 years that the government doesn’t yet seem willing to revisit.

The chancellor’s statement was laced with references to returning to spending levels not seen since 2010, a remarkable recantation of much of the past 11 years. Post 2010 austerity agenda embodied two beliefs. One was that getting the deficit under control was key to safeguarding the economy and the public finances. The other was that this should be achieved by cutting deep into the functions of the state. Sunak has doubled down on the first but repudiated the second.

Rishi Sunak shares George Osborne’s commitment to balancing the day-to-day budget. His new fiscal rule commits the Treasury to making sure all current spending is tax funded by 2024-25. But unlike in 2010, he has addressed the risk of overhasty withdrawal of fiscal support from a still-fragile economy, loosening the purse strings by £25bn next year compared to previous plans.

But the chancellor’s decisions on public spending were more remarkable. After a year of record tax rises, the chancellor showered more additional money of public services than anyone anticipated. And while spending in some areas will remain tight, the big picture it that this government wants to undo the failed experiment of shrinking the state, which his predecessors made the key dividing line of British politics. Sunak has concluded that running the public services on a shoestring is incompatible with winning elections.

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