Labour accuses Sunak of ‘smoke and mirrors’ budget due to lack of new money

Chancellor concedes only 20% of transport funding boost is new and other commitments in £26bn spending plans are recycled

Labour has accused Rishi Sunak of presiding over a “smoke and mirrors” budget after he conceded that just 20% of his biggest single spending commitment unveiled before the speech is made up of new money.

The Treasury has committed to almost £26bn of spending in a rush of announcements before Wednesday’s budget and spending review. It is expected to contain no tax cuts and the chancellor has sought to reassure anxious Tory MPs that he is a fiscal Thatcherite at heart.

Following months of general equanimity among parliamentary colleagues and the public as Sunak spent billions on Covid relief, he faces a hugely tricky budget, trying to balance the worries of Tory MPs about what they see as an increasingly high-tax, high-spend government, and demands for new infrastructure.

On Sunday, Sunak conceded that of £7bn to be pledged in the budget for what could be the flagship announcement, part of the so-called levelling up agenda, just £1.5bn is actually new money.

Challenged on Sky News about the makeup of the money committed for rail, tram and bus projects outside London, Sunak accepted that most of it had already been announced, with the main news on Wednesday being where it will be spent.

Sunak said he had already announced £4.2bn for the “overall envelope for improving how people get around our big cities”, adding: “What we’ve actually done is top that up, as you said, by £1.5bn, but then crucially give out the allocations in that envelope – where all the bits are going to go.”

Of a dozen Treasury trails for budget commitments, several others are not fully new spending, or involve money used to replace earlier commitments. For example, of money announced to assist crime victims, including victims of domestic and sexual assault, just 40% is new. For a new safer streets fund, two-thirds is new. Other announcements cover the UK Shared Prosperity Fund, which replaces funding from the EU.

Rachel Reeves, Labour’s shadow chancellor, said: “We’ve seen a weekend full of Treasury smoke and mirrors ahead of the budget – with a government that would rather re-announce plans than get the work done.”

The commitments already made by Sunak even before Wednesday are nonetheless extensive, including an extra near-£6bn for NHS catch-up and diagnostics, and £5bn for genomic health research, £3bn on skills, and £850m for museums and galleries.

Another £500m will be spent on families an early years programmes, including for family support programmes, and on so-called family hubs, a scheme reminiscent of Labour’s sure start centres, a programme decimated by austerity since 2010.

Sunak argued that in spending on families and early intervention he was not accepting that cutting Sure Start had been a mistake, arguing that work done more recently by Tory colleagues such as former business secretary Andrea Leadsom had only now demonstrated the need for such policies.

“What they show very clearly, as the evidence does, is the very early years in young families’ lives are critical and that’s where parents often struggle and that’s where actually we need to provide a little bit more attention,” Sunak told Sky.

In response, Reeves said Sunak was proposing a “pale imitation that doesn’t even take us back to where we were in 2010”.

She said: “It’s all well and good saying we’re going to invest in these family parks, but thousands of children’s centres and Sure Start centres that were proud features of our communities, particularly of our poorer communities, have long gone.”

In another interview, with the BBC, Sunak rejected a call from Marcus Rashford, the Manchester United striker and anti-poverty campaigner, to extend free school meal programmes into the school holidays for the next three years.

Sunak said that as with the furlough scheme, while such programmes were necessary during lockdown, “it’s right that we’ve transitioned to a more normal way of doing things”.

Sunak also confirmed that on Wednesday he will unveil the results of a review into business rates – but gave no sign that this could lead to a reduction in the levy. Business groups and many Tory MPs have called for a cut to boost high streets, but the Treasury appears resistant.

Writing in the Mail on Sunday, former minister David Davis castigated Sunak for his approach to taxation, and called into doubt the chancellor’s allegiance to the fiscal ideas of Margaret Thatcher.

“I knew Margaret Thatcher, so I will watch with interest whether he can match the brilliance that Thatcher, and her great Chancellor Nigel Lawson brought to government,” Davis wrote.

“Sadly, every indication so far is that his current course will take us on to the rocks – not away from them.”

Challenged about his policies on Sky, Sunak insisted he still stood for low-tax Conservatism: “Of course I do stand for that, and that’s what I would want to deliver, and that’s what my instincts are. But you also have to take a step back and think, what have I and the government had to grapple with over the past year and a half? We’ve had the biggest economic shock that we’ve experienced in 300 years.”

Contributor

Peter Walker Political correspondent

The GuardianTramp

Related Content

Article image
Budget 2021 live: ‘many to face living standards squeeze’ despite Sunak spending pledges – as it happened
IFS warns take-home pay will fall due to rising prices and taxes; Sunak announces universal credit taper reduction and fuel and alcohol duty cuts

Andrew Sparrow and Graeme Wearden

27, Oct, 2021 @5:47 PM

Article image
Budget 2021: Sunak softens universal credit cuts to tackle squeeze on families
Chancellor announces measures to help households, with lower alcohol and fuel duties

Richard Partington and Jessica Elgot

27, Oct, 2021 @1:07 PM

Article image
Rishi Sunak faces Tory backlash over ‘big state, high tax’ budget
Chancellor receives lukewarm reception from Conservative grandees over scale of spending

Rowena Mason Deputy political editor

28, Oct, 2021 @6:01 PM

Article image
Rishi Sunak urged to cut business rates to unlock billions in investment
Employers’ groups warn ahead of budget that failure to take action would hit UK’s economic ambitions

Richard Partington Economics correspondent

13, Oct, 2021 @11:01 PM

Article image
Keir Starmer misses PMQs and budget after positive Covid test
Ed Miliband stands in for Labour leader at PMQs and Rachel Reeves will respond to Rishi Sunak’s statement

Jessica Elgot and Aubrey Allegretti

27, Oct, 2021 @11:46 AM

Article image
Autumn budget 2021: what do we already know about Rishi Sunak’s plans?
A round-up of indications by the chancellor and Treasury of what he is likely to announce on Wednesday

Peter Walker Political correspondent

24, Oct, 2021 @9:30 PM

Article image
Budget 2021: what’s really going on in the UK economy?
Rishi Sunak will be looking at key indicators such as GDP growth, public debt levels and inflation as he draws up his autumn budget

Richard Partington Economics correspondent

27, Oct, 2021 @5:00 AM

Article image
Labour says Hunt budget unravelling amid criticism on pensions
Shadow chancellor says pension changes are ‘wrong priority, at the wrong time, for the wrong people’

Kiran Stacey Politics correspondent

16, Mar, 2023 @6:35 PM

Article image
Budget 2021: chancellor limits spending to start building election war chest
Rishi Sunak reassures Tory MPs that spending enabled by stronger than expected recovery will not be repeated

Larry Elliott and Heather Stewart

27, Oct, 2021 @7:58 PM

Article image
'Red wall' Tory MPs urge Sunak to cut business rates for shops
Northern MPs tell chancellor his budget should protect high street and tax online retailers such as Amazon

Rajeev Syal and Phillip Inman

28, Feb, 2021 @10:30 PM