Rishi Sunak plans painful cuts to local councils, further education and prisons. It’s bad economics, and even worse politics
An old adage in business is that turnover is vanity and profit sanity, but cash is reality. Any chief executive can shout about their sales figures while turning a blind eye to the discounts and offers that brought in the customers; what really counts is how much cash is in the bank. In British politics, unquestionably the best salesman of his generation is Boris Johnson, who has made the electorate some unbelievable promises: get Brexit done, “level up” the country, race to net zero. The result won him a landslide at the last general election and still-healthy poll ratings today.
And yet in a fortnight, his government will have to disclose its cash position: how much it expects to be taxing the public over the next few years, how much it will spend on schools, hospitals, policing and mitigating climate change – and how much it will have to borrow and to cut from departmental budgets. When Rishi Sunak reads out those figures in the budget and the three-year spending review, some of the strange jubilation that has hung over the entire Conservative enterprise this autumn, and marked the party’s conference in Manchester, will dissipate. Reality will bite and, the early forecasts indicate, it has sharp teeth.