Let's Build Britain A Better Future With A Balanced Budget

Rishi Sunak has been one of the political stars of the pandemic. Almost unknown outside Westminster before being appointed Chancellor in February 2020, he has shown remarkable creativity of purpose, grasp of policy and command of detail over the last year.

- Leo McKinstry

But as Britain begins to emerge from the crisis, Mr Sunak faces his sternest test.

He is tasked with a highly delicate balancing act between two competing objectives.

On one hand, he has to boost the fragile economy. On the other, he must begin to repair shattered public finances, with national debt now more than £2.1trillion and by far the biggest peacetime deficit in history.

It is this duality that makes Wednesday’s Budget so intriguing and challenging.

An emphasis on economic growth has to be accompanied by a return to fiscal restraint.

Siren voices claim the Treasury’s empty coffers are of no immediate concern, given the low cost of borrowing and the need to prioritise recovery.

It is a stance that recalls the old Ronald Reagan joke: “Don’t worry about the deficit. It’s big enough to look after itself.”

No responsible Government could take that approach. A rise of just 1 per cent in interest rates would push up the cost of Whitehall borrowing by £25billion – the equivalent of 5p on the basic rate of income tax.

As one Government source put it yesterday, current levels of debt are “totally and utterly unsustainable and expose us to huge risks”.