Sunak’s Covid budget offers a glimpse of Britain’s Brexit freedoms

Rishi Sunak’s planned corporation tax hike is a reminder of the importance he sets by trying to put the public finances on a sounder footing. He think that his room for manoeuvre in this crisis has been, in part, because the public finances were in reasonable shape before it. 

As I say in the magazine this week, his concern about debt has long been about the cost of servicing it (which remains low) rather than its precise level. But the debt pile is now so large that small movements in interest rates have big consequences.

But straightening out the public finances will need growth. Tax rises will be tricky given the Tory manifesto pledge not to raise income tax, National Insurance or VAT. Spending cuts are hard too given the sheer number of commitments that the Tories have made. Far more impressive growth than we have seen in recent years will be required to make the public finances more sustainable.