Rishi Sunak used his first Sunday Times column to give Rachel Reeves some unsolicited advice ahead of the November budget – and what he said next will shock you.
Inheritance tax? Carbon tax? A wealth tax that only kicks in if you were born after January 2009? No, dear reader, this isn’t the smoking ban (Sunak’s self-declared single greatest achievement while in office). The answer, of course, is to cut spending.
Analysing Reeves’ comments about her budget headroom, Sunak reckons the OBR forecasts haven’t been as bad as feared, and the Chancellor is looking at a hole closer to £20 billion than £30 billion.
However, he warns her not to take too much notice, writing: “During Jeremy Hunt’s tenure as chancellor, we had a swing of more than £10 billion between the first and second rounds. When I was at No 11, I found these fluctuations particularly problematic, as I knew my next-door neighbour would be eager to spend any upside.”
Heartening endorsement of Boris Johnson’s fiscal responsibility out of the way, Sunak advises the Chancellor to learn from budgets past and leave a little more headroom.
He then moves to what his friends in Silicon Valley would call “solution-based thinking”. For the former PM, the choice is stark: raise tax (boo) or cut spending (hell yeah).
Extra headroom from raising taxes would not create a “virtuous circle” of pleasing bond markets and reducing borrowing costs as the markets would calculate that this would depress UK growth further.
So the only solution is to cut spending. Unhelpfully for the Chancellor, Sunak doesn’t give any advice on how she’s meant to do that, although he does admit it would be “difficult to achieve politically”.
Searing political analysis from the former chancellor. The Pygge looks forward to his football column: just score more goals, and concede less.
[Further reading: Labour’s new common ground]
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