Conservative backbenchers have showered praise on Rishi Sunak after his summer statement, but as he declared himself “unencumbered by dogma”, some fretted publicly about how and when the public finances will be repaired.
The chancellor promised to set out in a budget and spending review in the autumn how he will “put our public finances back on a sustainable footing” in the “medium-term”.
But with the Resolution Foundation thinktank estimating this year’s budget deficit at £350bn, some colleagues urged him to be clearer about how he plans to do so.
Even before the pandemic, Boris Johnson’s government had sought to draw a line under a decade of austerity, promising a significant increase in public investment. But it is yet to explain how that will be paid for – and some Tory MPs have begun to grumble about the rejection of fiscal prudence.
Sunak’s predecessor, Sajid Javid, said: “He will be acutely aware that interest rates will not stay low forever and that we will eventually need to bring our national debt back under control in order to sustain recovery, continue to create jobs and keep taxes low.”
The Brexit campaigner and Tory MP Steve Baker said Sunak’s statement was a masterclass in economic interventionism – but expensive. And John Redwood, a former cabinet minister during John Major’s premiership, suggested the government was right to increase borrowing to weather the crisis but warned it must be a one-off and the country “must earn its living”.
However, Robert Halfon, the chair of the education select committee, said the mini-budget signalled the scale of the positive change taking place in his party. “I think the Tory party is changing in a massive way. It’s moving to more of what I call a Conservative workers/social democratic model of government which is where the country is,” he said.
“There’s a sea change in Conservative thinking, I genuinely think that. I’ve been in the party for years and I can hear the way blue-collar worker conservatism is now being mainstream across the party, as well as social justice issues and especially on apprenticeships and skills.”
Asked about colleagues’ concerns about spending, he added: “Rome wasn’t built in a day and for a party built on free market libertarian principles, there’s always going to be that element. But the amount of money going in is extraordinary.”
The Tory MP Steve Brine, a former minister, said: “This was a statement of interventionism – and intent – from a chancellor on the up. It was as firm on values as it was on giveaways to support the economy but both will be tested to the max over the second half of this year.”
Jonathan Djanogly, the Tory MP for Huntingdon, said, “I like it. It has a theme, is rational and with a good innovative twist – delivered with confidence.” Asked whether he sensed any unease among Tories over the large sums being spent, he said: “There is an underlying debate to be had within the Conservative party on tax/spend. But this has not yet become an antagonistic one – which in itself points to the trust being given to the chancellor.”
In a passage at the end of his speech, the ambitious Sunak – who has assiduously built up his personal brand – set out his political approach.
“For me, this has never just been a question of economics, but of values: I believe in the nobility of work. I believe in the inspiring power of opportunity. I believe in the British people’s fortitude and endurance,” he said.
All the government’s communications about the summer statement were liberally peppered with Sunak’s signature, with even the official Treasury press release headlined, “Rishi’s plan for jobs”.
The shadow chancellor, Anneliese Dodds, responding to Sunak, cautiously welcomed his plan, insisting Labour would be a “constructive opposition” – but said the public health response had been far too slow. “As we have seen throughout this crisis, the failure to match soaring rhetoric with meaningful action has consequences for people across the country,” she said.
She also took aim at the government’s one-size-fits-all approach to supporting the economy, which has “created losers”, as some businesses are still not able to open because of the virus and have been starved of cash flow.
The acting leader of the Liberal Democrats, Ed Davey, said he welcomed the short-term measures but there was no serious blueprint for a long-term economic strategy for dealing with unemployment, climate change and inequality.
“Fundamentally, we need a radically new approach to building a radical new green economy for everyone. We must match the scale of the economic and climate crises with the courage to invest £150bn over three years in a green recovery plan for green jobs in all parts of our country. Sadly, ministers have fallen far, far short of what is needed for people and for the climate.”