London Daily

Focus on the big picture.
Thursday, Jul 02, 2026

Sunak goes long on support for jobs – but says little about NHS or inequality

Sunak goes long on support for jobs – but says little about NHS or inequality

Analysis: Not quite the ‘same old Tories’, but ‘levelling up’ clearly has a narrow meaning for the chancellor


Rishi Sunak both is, and isn’t, a typical Tory: he’s an extravagantly rich, public school-educated former hedge fund manager; but also a coke-swigging Star Wars fan with a slick Twitter game who works from home in a hoodie. And his budget on Wednesday was, and wasn’t, a typical Tory budget.

Labour has repeatedly accused the Conservatives in recent weeks of wanting to return to “business as usual”. But the political and economic terrain has been changed dramatically by the past 12 months, in ways that are likely to be long-lasting.

Sunak’s statement was shot through with reminders of the extraordinary support the government has put in place during the Covid crisis.

Once you’ve promised to do “whatever it takes,” to support businesses and subsidise jobs, it’s politically all but impossible to “pull out the rug”, as the prime minister put it recently.

When the chancellor tried to turn off the furlough scheme last autumn, it was the resurgence of Covid that stopped him – but also the expectations of millions of workers whose jobs had been kept afloat by the taxpayer.

Perhaps stung by that experience, the chancellor has now decided to “go long,” as he called it, extending many of the support schemes for months, well beyond the end of the government’s planned “roadmap”.

The Treasury now puts the total cost of emergency Covid measures at a historically extraordinary £352bn.

And even once the worst of the pandemic is over, while Sunak is very keen to redraw exactly the political dividing line that served George Osborne so well in 2010 and 2015 – sensible Tories vs spendthrift Labour – he is doing so in a different way.

While public sector spending cuts, many of them hitting welfare claimants who could ill bear them, were Osborne’s weapon of choice for balancing the books, Sunak claimed the Tories are now the party of public services.

So big businesses will pay, through higher corporation taxes, with smaller firms carefully excluded to dampen the backlash from Tory MPs, and middle-earners will be caught up in what economists call “fiscal drag” – paying more tax because thresholds are not moving up in line with inflation.

Cutting corporation tax was a trademark policy for the Osborne-Cameron government, symbolising what was then the Conservatives’ ideal of global competition.

Increasing it back to 2010 levels has been a Labour policy for years – and once Sunak’s increases are implemented, the overall tax burden in the UK will be back at levels last seen when Roy Jenkins was chancellor in the 1960s. Hardly the “same old Tories”.

Indeed, the relatively muted reaction from the Tory back benches underlined the fact that it’s not just the economic context that has changed, but the shape of the Conservative party.

Philip Hammond and many of his fellow fiscal hawks have either been swept out of parliament or relegated to the very back benches – and many of the noisiest voices in the parliamentary party are those of the new MPs from the red wall seats, for whom small-c fiscal conservatism is less of a cherished cause.

Many of them were buoyed by the announcement that they may receive a handout from the new “levelling-up fund”. Labour dismisses this as pork barrel spending, shovelled out to favoured constituencies – but also privately concede it is hard to counter.

Yet there were aspects to Sunak’s approach that were depressingly familiar from the past decade of Conservative governments.

The £20-a week universal credit increase has been retained, but only until September, when removing it will still increase child poverty and hit cash-strapped households hard.

Overseas aid is still being cut; unspecified cuts in departmental public spending of up to £4bn are now pencilled in for future years; and public sector pay is being frozen for many workers, as Sunak announced last autumn.

And as Keir Starmer rightly identified in his response to Sunak’s statement – one of the toughest gigs for an opposition leader – many pressing issues were completely missing from the chancellor’s statement – social care, the NHS, inequality, insecure work.

Johnson and Sunak have a specific, and narrow idea of what “levelling up” and “building back better” means: infrastructure projects, business investment, low-tax buccaneering freeports.

To counter it, rather than caricature them as textbook Tories, Starmer will need to fill out his own, as yet rather thin, picture of what post-pandemic Britain could look like.

Newsletter

Related Articles

0:00
0:00
Close
UK Government Confirms Rejected Asylum Seekers to Remain Amid Enforcement Challenges
UK-China Economic Talks Focus on Services Trade and High-Value Sectors
Buckingham Palace Revamp Plans Unveiled to Modernise Royal and Public Facilities
Two Dead After Light Aircraft Crash in Essex Field, Investigation Underway
Princess Diana Marked at 65 With UK Tributes Reflecting on Her Public Legacy
England Teachers Face New Pay Cap Rules for Academy School Leaders Under Education Reform
Dublin Security Alert Escalates After Stabbing and Reports of Transport Disruption
UK Government Faces Scrutiny Over £10,000 Asylum Living Cost Contribution Requirement
England Prepares World Cup Knockout Match Against Democratic Republic of Congo
Northern Rail Project Warned of HS2-Style Cost Risks by UK Parliamentary Committee
UK Tightens Asylum Rules as Most Rejected Applicants Expected to Remain in Country
UK Heat Health Alert Issued as Temperatures Expected to Exceed 30°C Across England
Halifax Brand to Disappear From UK High Streets in Lloyds Banking Group Restructuring
England Teachers Receive 6.6 Percent Pay Rise Over Two Years as Schools Warn of Budget Strain
UK Defence Spending Plan Sparks Budget Clash as Regional Infrastructure Projects Face Pressure
Inquest Continues in Northern Ireland into Death of Noah Donohoe in Belfast
UK Travel Industry Calls for Suspension of New EU Border System During Peak Holiday Season
Telegraph Media Group Acquired by German Media Firm in £575 Million Deal Completion
House of Commons Warns Northern Rail Upgrade Risks Repeating High-Speed 2 Cost Overruns
UK Transport Unions Warn of Summer Strike Action Over Pay Disputes
UK Health Secretary Calls Maternity Care Review a “Watershed Moment” for NHS Reform
Nigel Farage Faces Questions Over £270,000 Payment Linked to Gold Marketing Firm
Labour Government Faces Internal Division Over North Sea Oil and Gas Policy Direction
National Screening Committee Invites New Proposals for UK Health Screening Programmes
UK and China Hold Industrial Strategy Talks on Trade and Export Growth Opportunities
UK Defence Funding Gap Widens as £4.7 Billion Shortfall Puts Pressure on Spending Priorities
United Kingdom Faces Historic Demographic Shift as Deaths Forecast to Exceed Births in England and Wales
United Kingdom Introduces Major Motability Scheme Reforms Targeting £1 Billion in Long-Term Savings
Global Billionaire Numbers Rise 13 Percent Amid Artificial Intelligence Stock Boom
Body of Fifteen-Year-Old Boy Recovered from Manchester Reservoir
Major Rail Disruption in UK After Cows Stray Onto Intercity Tracks
UK Launches National Campaign to Reduce Water Consumption After Heatwave
Foreign Secretary David Lammy Raises Case of UK Woman Death with US Authorities
Shetland Islands Council Approves Subsea Tunnel Plans Linking Major Islands
Telegraph Media Group Takeover by German-Led Consortium Completed
Resident Doctors in England Accept Government Pay and Conditions Deal
Andy Burnham Sets Out Ten-Year Economic Vision Amid Labour Leadership Debate
Asylum Seekers in UK Face £10,000 Contribution Requirement Under New Law
UK Government Moves to Break Apple and Google App Store Dominance
New UK Steel Tariffs and Import Quotas Aim to Shield Domestic Industry
Damning Report Exposes Failures in Maternity and Neonatal Care Across England
Government Data Reveals Five Billion Pound Shortfall in UK Defence Budget
Prime Minister Keir Starmer Unveils Three Hundred Billion Pound Defence Investment Plan
UK Crime and Policing Act 2026 Comes into Force with New Justice System Reforms
UK Prime Minister Hosts NATO Secretary General Mark Rutte for Security Talks at Downing Street
UK Tightens Oversight of Emissions Trading Scheme Through New Ministerial Directions
UK Issues Statement at UN Security Council on Violence in the West Bank
UK Environment Agency Clears Illegal Waste Site in West Yorkshire After Court Action
UK Resident Sentenced for Fraudulently Claiming £30,000 in Covid Business Loans
UK Launches Taskforce to Help Young People Claim Dormant Child Trust Fund Savings
×