Camilla Tominey:

Despite denials that tensions are resurfacing between the Chancellor and No 10 over government borrowing, many Tories want a return to ‘sustainable public finances’

When Rishi Sunak remarked at the weekend that he would have to take the Prime Minister’s credit card away, he insisted he was joking.

Referring to his “incredibly close relationship” with Boris Johnson, he brushed off suggestions that historic tensions between No 10 and No 11 had been reignited amid mounting concern about the Government’s big spending plans.

Yet as he prepares to deliver the spending review today in the face of Britain’s biggest economic crisis since the Second World War, Tories believe it is only a matter of time before the Chancellor is forced to put the squeeze on the profligate PM.

Fiscally disciplined Conservatives have been quietly queuing up to raise their concerns about Mr Johnson’s overly enthusiastic shaking of the magic money tree since he took power last year.

But in the wake of a pandemic that put annual government borrowing up to £350 billion, the Westminster whispers are becoming harder to ignore.

Encouraged by Mr Sunak’s quest to return to “sustainable public finances by the spring”, prudent Tories are secretly hoping he delivers a Sage-like “worst case scenario” in his miniBudget.

For this largely lockdown sceptic group of MPS, the move would serve the dual purpose of weakening public support for both tighter restrictions and costly infrastructure projects the country can ill afford.

As one senior Tory put it: “We’ve heard the doom and gloom from the scientists but now it’s time for Rishi to get real with the public about the dire economic circumstances the country is facing.”

Referring to Mr Johnson, the veteran MP added: “The man’s gone mad. Along with Hancock and Gove, they’re behaving like drunks on a Friday night.

“It’s like Monopoly money. There are a great many Tories taking Rishi aside and saying: “This has got to stop.”

“Boris doesn’t seem to get the economy but thankfully the Chancellor knows that the core part of the party understands the importance of good finance.”

Yet while he continues to plug the Covid-shaped hole in the nation’s finances in the short term, with an extra £3 billion expected to be announced for the NHS alone today, alongside a multi-billion pound pledge to shore up post-brexit Britain, Mr Sunak faces a long-term dilemma.

As a cash-splashing Chancellor, he has seen his political star rise with the roll-out of the furlough scheme and initiatives like Eat Out to Help Out.

Currently the most popular politician in Britain with an approval rating at 48 per cent, according to Yougov, he is viewed as the

Government’s resident Father Christmas. Determined to save as many jobs as possible with unemployment already up by 750,000, his immediate focus remains on lavishing money on those hardest hit by the pandemic.

But Mr Sunak will have no choice but to adopt a more Scrooge-like position when the job support scheme is finally wound up at the end of March and action is needed to control spending once a vaccine allows life to return largely to normal.

As well as potentially making him unpopular with the public, he faces a backlash from colleagues who insist the Conservatives must remain the low-tax party; hence their desire for Mr Sunak to control public spending rather than raise taxes – a move that in turn is likely to put him at odds with the PM.

In recent weeks Mr Johnson has already ruled out rises in income tax, VAT and national insurance, as well as overruling the Treasury on defence spending and scrapping the pensions triple-lock.

Meanwhile, “One Nation” Tories are opposing a proposed cut to the foreign aid budget while long-serving MPS like Mike Penning have signalled their disdain for the anticipated public sector pay freeze. Hints at a hike in capital gains tax and a cut in higherrate pensions tax relief have also had a mixed reception, leaving Mr Sunak with little political room to manoeuvre.

He may deny harbouring ambitions to be the next prime minister, but with Tories openly touting him as Mr Johnson’s natural successor he is going to be judged on his handling of the nation’s purse strings not just between now and the next Budget, but beyond.

So does he push back against the party, or the Prime Minister?

Tory “grey hairs” are worried the 40-year-old rookie, who was only elected to Parliament in 2015, has not yet mastered the dark art of political manoeuvring in Downing Street, not least in his dealings with Michael Gove, the influential Cabinet Office minister.

It has perhaps not helped that as one of the youngest Chancellors to have ever been appointed, the father-of-two has positioned himself as apprentice to Mr Johnson, who he insists on calling “Prime Minister” rather than “Boris”.

Mr Sunak has even had to give up his own spin doctor, Allegra Stratton, to become the premier’s own press secretary.

According to one former minister: “Rishi has long been a lone voice,

‘It’s time for Rishi to get real with the public about the dire circumstances the country is facing’

arguing against this endless cycle of lockdowns, but he hasn’t quite worked out how you operate in a factionalised No 10 because he’s only been there five minutes.

“The Chancellor is the second most important minister in government and historically you would expect a lot more pushback, but maybe Rishi is just biding his time. He’s certainly not stupid.”

On the contrary, the MP for Richmond is seen by some as an “operator”, in the subtlest sense of the word.

There is even talk in Treasury circles of Mr Sunak “pitch rolling” the idea of scrapping higher-rate pensions tax relief and aligning capital gains tax with income tax to inure higher earners to the idea of a wealth raid in a

‘The Chancellor is the second most important minister in government and you would expect a lot more pushback’

bid to win their support for something less aggressive further down the line.

It would certainly make electoral sense for the Chancellor to raise taxes in the middle of the parliamentary term in order to cut them again before the country goes to the polls in 2024. He may also be minded to cut spending in a bid to balance the books and then switch the taps back on ahead of the next general election.

Either way, the future of the Johnson administration rests heavily on the shoulders of a man who has been in government less than two years. For as his predecessor Denis Healey succinctly put it: “A prime minister who doesn’t have a good chancellor is finished”.