2020 is going to be a big year for our United Kingdom. On Friday, we will finally break free from the shackles of the EU and chart a new course for ourselves in the world.
It will now be Rishi Sunak who will unveil it, but this will be an opportunity for the Conservatives to cement their support across the country by boosting funding for frontline public services. The result of the 2019 general election should also give the Chancellor the political capital to set out long-awaited and much-needed reforms to social care.
A more generous approach to public spending does not mean that the government has to abandon its commitment to balance the current budget or reduce debt. There is still plenty of room to deliver savings for the taxpayer by rooting out waste in Whitehall, enacting supply-side reforms to housing and childcare, and addressing the government’s long-term liabilities.
However, as we move from a decade of recovery to a decade of renewal, the Chancellor can use record low interest rates to unleash an infrastructure revolution across the whole of the UK.
He can raise productivity and boost living standards with record investment in transport, housing, digital infrastructure, and research and development.
As the Brexit uncertainty fades, there is also an opportunity to unlock a tidal wave of private investment through tax reform. By allowing businesses to fully and immediately deduct investment in plants and equipment, as well as replacing Business Rates with a commercial land tax, the Chancellor can increase investment and raise wages, particularly for workers in manufacturing industries.
Retaining the support of working-class voters will require a blue-collar Budget.
Rishi Sunak should carry on cutting taxes for workers by raising the National Insurance Threshold and extending the freeze on Fuel Duty. He also needs to address issues that matter to low income voters, such as the affordability of childcare or problems with Universal Credit.
In some of the new areas held by the Conservatives, close to half of the working-age population will be entitled to Universal Credit. Improving how the system supports low income workers (for example, by reducing the UC taper rate) should be a top priority.
The affordability of housing needs to be addressed too. Young people will never see the benefits of capitalism if they have no chance of owning capital, so Sunak should announce radical reforms to the planning system and invest in infrastructure that unlocks new housing. He should also slash Stamp Duty to increase home ownership and consider Sam Gyimah’s proposal for a Flexible Right to Buy.
The environment is moving up the political agenda and the Conservative Manifesto included some great commitments to increase the rate of tree planting, the level of recycled content in plastic packaging, and to invest in decarbonisation schemes.
However, the Chancellor can be both more radical and more conservative in this area. He should look at replacing the current cobweb of green taxes and subsidies with a new, market-based system of Carbon Pricing. The aim of this change would be to reduce carbon emissions without excessive intervention in the economy or the government picking winners and losers.
These issues are not only the right policy priorities for the government, but the right political priorities for the party too.
The Chancellor needs to ensure voters’ experiences of public services improve and that they start to see a transformation of the infrastructure in their area by the time of the next election. He also needs to boost living standards with tax cuts and supply-side reforms, and address the genuine concerns of younger voters around housing affordability and the environment.
If Rishi Sunak delivers these changes, he can ensure that the result of last month’s election was a floor and not a ceiling.
Ryan Hoey, Politics Student at Queen’s University Belfast and Conservative Candidate in the 2018 Local Elections