Being Chancellor of the Exchequer is never a barrel of laughs. Even less now when largely due to the economy of the coronavirus pandemic, production has plummeted and public debt is skyrocketing.
It is therefore a tribute to the remarkable ease of Rishi Sunak under the pressure that he was able to joke yesterday about his neighbor next door in Downing Street: “I should withdraw his credit card”.
But the Prime Minister’s carefree attitude to tax dollars is no laughing matter, because Sunak must know it better than anyone. It will become clear to all taxpayers across the country when the bills need to be paid.
Boris Johnson speaks via video link from 10 Downing Street during Prime Minister’s Questions
Boris Johnson’s car was spotted with two parking tickets and a poster on the windshield
Paying off the debt, however, is not something Boris Johnson has ever taken seriously in his personal life. It’s a private matter between him and his bank manager.
But if this characterizes his conduct as the First Lord of the Treasury, then it is rightly a matter of the greatest public concern.
Readers may recall that when an argument between Johnson and his partner, Carrie Symonds, was leaked to The Guardian in June last year by a listening neighbor, it was reportedly recorded accusing him of ‘not not worry about the money. ”
And photos of her car outside her apartment at the time showed what she could have meant. It was decorated with unpaid parking tickets.
It was not due to the particular stress of the time (Johnson had just launched his campaign to lead the Conservative Party).
GQ Magazine Editor-in-Chief Dylan Jones revealed in 2008: “ I have employed Boris Johnson for eight years as a GQ automotive correspondent, and although he probably cost the company 5,000 parking tickets , I wouldn’t have it otherwise. ‘
Again, this was a private matter between Johnson and his employer: but when he is the man with the ultimate responsibility for the national finances, we might well decide that “any other way” would be an improvement.
That was certainly the opinion of Johnson’s former boss at The Daily Telegraph, Max Hastings.
Sir Max never quite recovered from the fact that when they put 1000 bets on the 2010 general election result and Johnson lost, he sent his former editor a letter with the words ” check attached ”. But there was no check.
Obviously, the colossal loans the government took out during the Covid crisis, in common with other administrations across the western world, are not for Johnson’s pleasure.
Much of the staggering $ 350 billion bill is intended to pay the costs of the time off program, which has been vital in educating businesses and employees during times of lockdown.
It’s a tribute to Rishi Sunak’s remarkable ease under the pressure he was able to joke about his next door neighbor in Downing Street yesterday: ‘I should withdraw his credit card’
Without it unemployment would have reached truly shocking levels and this too would have had disastrous effects on the national balance sheet, as well as on the lives of millions of people.
But the truth is, it doesn’t take a global pandemic for Johnson to be bill paying like a man who just won the lottery (and, in a way, becoming a PM was Boris Johnson’s version of the jackpot) .
For example, he went against the exhortations of his transport advisor at No.10, let alone his closest assistant at the time, Dominic Cummings, and hit the accelerator on the HS2 rail project. although he had vigorously opposed himself before entering Downing Street.
Its cost had gone from the initial estimate of $ 30 billion to $ 56 billion, and then allegedly “the final estimate” to $ 107 billion. At that figure, it’s not only the costliest infrastructure project in our history, it also promises to be the least justifiable out of all conventional cost-benefit analysis measures.
As Sir Simon Jenkins, British Rail board member from 1979 to 1990, observed: “ The HS2 has been challenged by virtually every parliamentary and official report I have read since 2010, the HS2 has not has nothing to do with trains, much less with economics, politics, or the north-south balance. This is Boris Johnson.
In refusing to suspend the project last February, Johnson himself justified it by saying that Britain should have the “courage to dream”. Charming. But it will be a nightmare to pay the bills, which will continue to flood long after Johnson himself leaves office.
Mr Johnson and his former Daily Telegraph boss Sir Max Hastings (pictured) had bet 1,000 on the 2010 general election result
Johnson’s stint as mayor of London has warned us of the consequences of his love for what the French like to call “big plans.”
The “ garden bridge, ” for which he successfully persuaded Chancellor George Osborne to fork out $ 30 million in taxpayer dollars after the mayor broke his initial promise to collect all the money privately, saw its estimated costs climb to 200 million, before it was abandoned by Johnson’s successor at Town Hall.
It is certainly true that the national government, for which Boris Johnson is responsible, can now borrow at surprisingly low interest rates.
The Debt Management Office recently auctioned off 500 million indexed bonds with a maturity of 2056 for an RPI yield minus 2 percent.
But as the director of the Institute for Fiscal Studies, Paul Johnson, warns, “He seems to be able to borrow as much as he wants for pretty much free. This makes it the perfect time to make valuable investments. But there are big risks.
“The temptation to waste is all too obvious. That would make the situation worse for us. And if interest rates start to rise without a corresponding increase in economic growth, we could easily slide into a horrible fiscal spiral.
And as the Mail exposes today in a revealing list of almost bizarre spending, the state has a perpetual propensity to waste money, and not just when normal purchasing processes have been bypassed during frantic attempts to shut down. provide personal protective equipment for the NHS at the height of the pandemic.
The detail that caught my eye was the thousands spent on first class air travel by Treasury officials.
When the government department supposedly designated to stimulate debauchery in spending does this, it hardly inspires confidence that it can control the spending of other departments that are only looking to increase their own budgets.
Institute for Fiscal Studies director Paul Johnson has warned that if interest rates start rising without a corresponding increase in economic growth, we could easily slide into a horrific fiscal spiral.
This, in fact, is the institutionalized problem facing Sunak, which preoccupies all chancellors.
When asked to find savings, every spending ministry is an expert in the field of the shroud, and no Cabinet minister will demand cuts from their colleagues because he (or she) wants their support at the Cabinet table. on a host of other issues.
The Chancellor will therefore have had little support from his colleagues in any attempt on his part to block the Prime Minister’s decision last week to grant the Defense Ministry a 4% budget increase in real terms over the course of each of the next three years.
And if there is one government department that over decades has shown itself to be a leader in wasting billions, it is the Department of Defense.
However, this is little more than margin of error stuff compared to the waste that the Prime Minister allowed last week with his so-called ‘net zero carbon’ training (as good as it gets him. to appear on the international stage, when Glasgow hosts the United Nations climate change summit next year).
For example, replacing all our boilers with so-called “ air-source ” heat pumps will not only cost at least four times as much as gas: the huge tax subsidies required will be for less efficient products for production. of heat than those we currently use in our homes.
Public spending to finance more expensive energy (for example, with wind turbines replacing gas-fired ones for industrial use) is what economists call “bad investment”.
Getting our companies to pay more for their energy than their international rivals is the way of scarcity: and, even if other nations did the same, it would still, ultimately, lead to job losses instead. only job gains that Boris Johnson boasts. he will realize.
Borrowing even more billions to decrease industrial productivity is, really, the mad house economy.
And the scariest thing is that I don’t think the Prime Minister is remotely concerned. Neither was he with those unpaid parking tickets.