Rishi Sunak Must Make His Mark By Resisting Siren Calls For Short Term Profligacy
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BY TOM HARWOOD
Rishi Sunak is a courageous politician. As a protégé of the Cameron clique it clearly was not the easy option to back Brexit in early 2016. His bold move against heavy pressure from the then Prime Minister was an early sign that 2016’s referendum would be nothing like 1975’s.
By the end of the referendum campaign, almost half the parliamentary Conservative Party backed Brexit – and rising star Rishi can take a lot of credit for helping legitimise MPs with big futures ahead of them declaring for Leave.
In his declaration, Sunak told the Yorkshire Post that he believed the UK will be “freer, fairer and more prosperous” as an independent country – a direct rebuke to Cameron’s BSE “stronger, safer, better off” catch phrase. Now there is a golden opportunity to make his argument a reality – but to make that happen the new Chancellor has a fight on his hands.
Pressure is brewing to tear up the fiscal rules enshrined in the Conservative Manifesto – and as a consequence plunge the country into deeper debt. The new Chancellor should be strong in standing up for fiscal discipline, not least because it is how he will keep his Brexit promise.
The Conservatives’ fiscal rules make this country freer, fairer, and more prosperous. Freer, because they hold back government overreach – allowing individuals to have control over their own lives. Fairer, because they prevent the intergenerational injustice of burdening the next generation with unspeakable debt. And more prosperous because they allow space for a flourishing private sector – the real driver of jobs and growth.
Thanks to prudent fiscal management over the last decade, day to day spending this year enjoys a £17.7 billion surplus. This should be more than enough to get going with a real levelling up agenda of tax cuts for working people. The 2019 manifesto was credible precisely because it enshrined fiscal rules, and outlined tax cuts and infrastructure investment to fit within them for a fully costed agenda. To abandon the plan that delivered a stonking majority – despite pressure from the left of the party – would be deeply dangerous.
Discarding discipline would not only weigh down the next generation with deeper debt and crowd out private enterprise, it would also cede economic arguments to the spend-happy socialists in the Labour Party.
The last thing the Conservative Party needs is to legitimise magic money tree economics, or downplay the negative effects of expanding the country’s debt burden as a proportion of the size of the economy. If the Tories offer a short-termist profligacy-lite agenda, they should not be surprised to see people opting for the full fat version instead.
Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides.
It should not be seen as a constraint for tax revenues to cover day-to-day spending, but a fundamental reality. Here today gone tomorrow politicians may not care, but budget deficits in reality are simply deferred tax hikes.
To be successful this Government has to be willing to face down pressure to pursue short term profligacy. Their stonking majority should give space for the kind of long term, disciplined, and bold pro-enterprise decisions this country needs to truly become freer, fairer and more prosperous.
Tom Harwood is an award-winning journalist and commentator. Follow him on twitter: @tomhfh