We now have created a situation where the OBR is effectively setting the immediate stance of fiscal policy. If economic expectations are poor, the finances look poor, so austerity or tax hikes follow – but these in turn make the economy and finances worse.
There is a limit to what can fairly and sensibly be achieved by raising other taxes and cutting public spending – especially when it comes to pay.
When I was responsible for the £600 million a year London Development Agency, I was shocked at how much management focus was just on getting money out of the door.
The recent history of the Conservative Party and the country is the ultras have had their way on both policy and personnel. The result – for both party and country – is now clear to see.
Some Tory members would see such a development as nothing less than an establishment coup: as a conspiracy of bad actors working together to win revenge for Brexit.
The ineptitude of its start has contaminated voter views of centre-right values as well as the Conservatives’ opinion poll ratings.
These may take time to bear fruit, but must reassure the markets now that the growth path in expenditure will be measurably lower. Such measures must involve doing less, as well as doing things differently.
And that energy bill support scheme, so disliked by some prominent Truss backers? Ninety per cent of the panel back it.
At a macro-level, it reinforces prudence and affordability. But at a micro-level, it can be an obstacle to speed, efficiency and innovation.
But there are truths in life – for example, that a stich in time saves nine, beggars can’t be choosers…and that you can’t spend more than your earn. His premiership ends with record spending and taxes.
The first of a series of five articles on ConservativeHome this week about the main challenges that await the new Prime Minister.
The Foreign Secretary will have to spend more to help with energy bills and finance tax cuts. As borrowing becomes more expensive, this will require either spending cuts, tax rises, or both.
Sunak has failed to learn from 2020. Gone is his boldness, replaced by dull platitudes and a weak response to national emergencies like soaring energy bills and the housing crisis.
“The Treasury Finance Ministry view of the world isn’t about structural reform to increase the productive capacity of the economy.”
There are 227 NHS trusts in England and if they all spent the lowest of these figures, £231,611, the total cost would be £52.6 million. 1500 nurses could be employed for that sum.