The UK now needs some of the fiscal prudence that Rishi Sunak is said to support
News Letter editorial of Tuesday August 10 2021:
Rifts between prime ministers and their chancellors are not unusual.
There was an almost permanent one between Tony Blair and Gordon Brown for the decade that they held those respective posts.
Margaret Thatcher fell out with two of her finance chiefs, one of whom — Geoffrey Howe — later in effect toppled her.
Harmonious relations between PM and chancellor, such as between David Cameron and George Osborne from 2010 to 2017, seem much less common than turbulent ones.
There is now a reported rift between Boris Johnson and Rishi Sunak. The appointment of the latter to overseeing the Treasury was seen as a political masterstroke. Sunak is a popular chancellor, and as the first person of Indian ancestry to hold that vital ministerial position, a personification of a Tory Party that is far more diverse than it was 20 years ago.
Sunak is also hard working and bright: you don’t become wealthy banker at Goldman Sachs if you lack such qualities.
He is also clearly a man who is confident in his views.
While Boris Johnson is a showman, with a keen sense of public opinion, Sunak is a real fiscal conservative.
Part of the current tensions are said to be over lockdown (the PM is more cautious). But another clash is over the PM’s instinct to spend, and so to please voters, and Sunak’s preference to restore the public finances.
If that is indeed a key cause of the rift, then it is a positive reflection on Sunak. Financial prudence is almost a lost political characteristic.
Governments around the western world seem increasingly relaxed about carrying huge debt burdens. Many experts say that interest rates are such that debt piles don’t matter.
Perhaps. But perhaps not.
It is deeply irresponsible for societies to spend profligately, and then leave younger generations to pay. Covid was a sound reason to turn on the spending taps, but great care will be needed to prevent the UK losing control of its debt.
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