Spend, Sunak spend as No10 hints at spree
THE new Chancellor is ready to turn on the spending taps, Downing Street indicated yesterday.
Attending his first Cabinet meeting in the role, Rishi Sunak repeated the Treasury’s demand that departments must cut 5 per cent from their budgets so more cash can be spent on schools and hospitals.
The Government appears to be keeping open the possibility of relaxing tough fiscal rules laid down by Mr Sunak’s predecessor, Sajid Javid, limiting the amount Ministers can spend.
Following Mr Javid’s resignation on Thursday, Treasury sources predicted Boris Johnson’s chief adviser Dominic Cummings would push for a spending spree in the Budget.
One said: ‘Cummings just wants to spend money.’
However, the Prime Minister’s official spokesman would only say that the Government will continue to have ‘a clear fiscal framework’, rather than pledging to stick to the present one.
It will add to speculation that the rules could change to enable Boris Johnson to spend billions more on infrastructure.
The pound jumped on Thursday as investors bet that the promotion of Mr Sunak to Chancellor would herald the beginning of increased spending. There was also continuing confusion over whether the Budget will go ahead as scheduled on March 11.
Number 10 would only say that ‘extensive preparations’ have already been carried out and would continue ‘at pace’.
Yesterday’s Cabinet meeting rubber-stamped Mr Johnson’s new points-based immigration scheme designed to reduce the number of low-skilled migrants entering Britain from the start of next year.
Yesterday Mr Javid wished Boris Johnson a ‘Happy Valentine’s Day’ as he left his home a day after his dramatic resignation when he was told he had to sack all his advisers.
Friends said that he intends to remain in Parliament.
As he opened yesterday’s
Cabinet meeting, Mr Johnson congratulated those present on ‘achieving or retaining’ their jobs after a wide-ranging shakeup which saw a host of senior figures sacked.
‘We have to repay the trust of people who voted for us in huge numbers in December and who look forward to us delivering,’ the premier said.
The PM also engaged in a calland-response session with his new team, asking them: ‘How many hospitals are we going to build?’ before they replied in unison: ‘Forty.’
Mr Johnson also asked the Cabinet how many more police officers would be recruited, to which they replied ‘20,000’.
There were indications that ministers are considering watering down Mr Javid’s fiscal rules, which say that public sector net investment should not average more than 3 per cent of GDP, and that debt interest should not exceed 6 per cent of revenue.
Asked whether these rules – which were contained in the Conservative manifesto – would continue, the PM’s spokesman said: ‘We will continue to have a clear fiscal framework, and that gets confirmed at Budget.’
The PM wants to set up a joint ‘economic unit’ composed of special advisers to both Number 10 and Number 11. It is understood that it is to be headed by Liam Booth-Smith, one of Mr Johnson’s team.