No.129 - 'Spend, Spend, Spend!' Mr Sunak, aka Cummings, Goes for Broke!

Dear James,

You certainly get around a lot. First it was PPS to Jeremy Hunt, then the same for Ben Wallis and then, yesterday, I caught a glimpse of you standing, a little sheepishly, at the end of the line outside No.11 as Mr Sunak held up his red despatch box prior to delivering his spend, spend, spend budget in the Commons. I am assuming that you are now a PPS to the Chancellor? In which case congratulations are in order. But also a word of caution. 

I suppose it’s difficult to refuse a job with such good prospects but are you sure this is not a poisoned chalice? Rishi Sunak appears at face value to have created the impossible. A massive spending budget with a refusal to increase the tax base. All bearable as long as interest rates stay low. I’m sure I don’t have to tell you that debt is the main threat to the global economy in the long run, even more important than Coronavirus. Yet Mr Sunak said again and again that “this budget gets it done”. The circle is squared. Traditional Tory values of small government and fiscal prudence can live side by side with a vast splurge to keep the north happy with its new masters. Such an idea could only come from one man – Mr Dominic Cummings. 

Mr Cummings’s fingerprints are all over the document and with Mr Javid, out of the way and Mr Sunak keen to do his masters’ bidding, this day had to come. Of course, Mr Sunak was upbeat, beaming like the cat that got the cream, happy to be the chancellor who announced the great ‘Turning Point’, the budget that ‘ended austerity’, the man who gave away the biggest sum since Chancellor Lawson in 1992. £30bn to be precise. £12bn to counter the Coronavirus situation and £18bn as investment in infrastructure ‘to level up’ the UK.  

But how is he – or are we – going to pay for it? By borrowing, according to Paul Johnson of the IFS. We shall be adding £60bn to our national debt by 2022 with net borrowing, which hit £38.4bn in 2019, planned to rise to £66.7bn in 2022. Austerity is over. Or is it? The government’s own OBR (Office of Budget Responsibility) predicts that the huge easing of policy by the Treasury will ‘fail to prevent growth over the next five years being even slower than in the decade following the financial crisis’.

So this budget is all a great gamble, all part of the great communication game of your government. It is based on the weakest growth rate we have had for many years. Growth will be needed to pay for the added interest on the national debt – especially if rates go up in the coming years. But the biggest elephant in the room is still the Brexit negotiations and your government’s  threat of crashing out into WTO terms. Blind optimism, belief in the future, conviction that we are better off in splendid isolation is no substitute for that other element in the equation. The element called reality. We are a small island, cutting itself off by building barriers between ourselves and the rest of the global economy. Oh brave new world! 

Mr Cummings’s ‘Go for Broke and Damn the Consequences’ strategy is abroad. Your party has become the party of public services and big government. Isabel Hardman of the Spectator says  "It could easily have been a Labour budget”. How does that feel I wonder in the ERG? Anything I suppose to ensure that Brexit succeeds? But the Cummings fingerprint was clearest when Sunak announced a review of the Treasury’s fiscal rules – instead of adopting the spending framework announced by his predecessor, Sajid Javid. This measure is akin to the coming attacks on ‘judicial review’, on the BBC and on the civil service. In other words the ‘revenge’ strategy of Johnson, Cummings and the ERG is the subtext of yesterday’s budget. 

James, you are clearly closer to the action than ever before but I do  hope you know what you are doing? There are dark days ahead and Mr Cummings and his assistant Boris Johnson are going to be severely tested. One bright spot though. I heard Mr Sunak on ‘Today’ this morning - yes, a Tory minister who dares to expose himself to proper scrutiny! He is clearly bright and a great communicator.  Watch out Boris. I’ve just seen your successor!

The sooner the better I think!

Kind regards,

BH - Your Concerned Constituent