Rishi Sunak spends the weekend flying around the world. After a short trip to Paris on Friday, the trip to San Diego begins on Sunday. Jeremy Hunt is locked up in Westminster to finalize the budget.
The Prime Minister is still heavily lobbied by MPs, businesses and interest groups. But insiders say the Treasury will submit a near-final draft to the Office of Budget Responsibility (OBR), where forecasters will determine the future direction of finances.
In the words of a source close to Hunt, it’s OBR’s projections that ensure the budget delivers nothing. The outlook has changed little since the fall statement just four months ago. That means the prime minister has little room to give a financial reward, other than some very late decisions like freezing fuel taxes, extending support for energy bills and boosting defense spending.
After years of extravagant spending on infrastructure, the Treasury Department is holding back, as indicated by Thursday’s decision to postpone the HS2 rail line again and postpone major road-building projects. “Inflation has been really bad for all of that,” a Whitehall official said. IBehind the scenes, Treasury has been wrestling with HS2 for two years. Amid fears that this project is spiraling out of control.
Instead, Mr. Hunt’s strategy encourages patience, and if borrowing doesn’t rise and the economy doesn’t plunge into a too brutal recession, he’ll hold out hope for tax cuts until the next election, perhaps later this year. A Conservative veteran said: “I think we will leave room to announce tax cuts in the autumn statement if the situation improves.”
Some lawmakers are surprisingly optimistic. “I don’t think it’s all hopeless,” one person said. Others, especially among Liz Truss’ former followers, are more uneasy.
Hunt plans to announce that he will accept some of the policies Truss had planned to pursue before the premature end of his term as prime minister, as part of an attempt to preserve Tory rights. . By raising the bar for individual tax deductions, he promises to reform the “doctor’s tax trap” that can arise when pension contributions increase. I UNDERSTAND – A key request of the Conservative Growth Group of Major Tracytes.
The prime minister also plans to outline how the government will reform business regulation, following a review of the topic led by Sir Patrick Vallance, before stepping down as chief scientific adviser next month. But other policies favored by the right have been frozen, such as changes to his IR35 tax rules governing how freelancers are paid. Britain Remade, a campaign group led by former Boris Johnson aide Sam Richards, has taken the bold step of permanently allowing companies to exempt all profits they reinvest in machinery and buildings from corporate tax. “Other than a permanent change, Richards said it was just a furlough plan for the growth of anemia in the UK over the past 13 years that all we needed was a vaccine.”
Mr. Truss’ plan for a series of “investment zones” will be revived, but in a much simplified form, with most of the tax incentives previously attached to the plan eliminated. “They wanted little mini-Liechtensteins to dot the land until the whole country was one,” said a Treasury source, adding that the idea was “Singapore on the Thames from the back door. ” was expressed. Instead, the zone will focus on universities and other research centers that could become hubs for business activity outside London.
Despite the “no drama” approach espoused by Mr Hunt and his boss Mr Snak, the Treasury Department is stuck in the fight against many other departments, and ministers have given the government a complete No 11 Quietly dissatisfied with the domination.
Workforce Pensions Secretary Mel Stride was asked to conduct a workforce review in the fall after it became apparent last year that the problem of low economic activity was widespread. Sources say there was initially talk that he would make some kind of policy speech earlier in the year, but as the budget got closer, the Treasury Department took more and more control over decision-making.
Government officials were keenly aware that economic slowdown and labor shortages would be one of the key issues in the first quarter of 2023, with Stride leading the charge. However, the promised speech has yet to materialize, and there are no current plans to publish the workforce review separately, instead all key aspects being swallowed up by the budget.
A Jobs and Pensions source said last month that all sectors were invited to submit policy proposals, but that it was up to the prime minister to decide what action would be taken going forward. We always knew it would be reflected, but I think everyone made it clear that it was Mel who led the review itself and drove the results,” they said.
Another future flashpoint between Stride and Hunt is looming in the coming months, with the two ministers likely to clash over whether to raise the public pension age. Treasury sources have hinted that they want to move up their retirement age to save on long-term spending, but DWP insiders say this is justified given life expectancy has stagnated. He claims he has no sex.
The spotlight will shift from the prime minister once Wednesday’s budget is completed. But it remains more than 15 points behind Labor. As one of his Labor shadow ministers admitted: All my day-to-day work with Johnson and Cummings was campaigning, not governing. ” Nevertheless, I A London-based foreign diplomat asked pollster experts for a briefing on the upcoming local elections so they could understand if the opposition was really on track to win a majority in the House of Commons next year. I understand that you are quietly approaching.
The prime minister admitted on Friday that he was having a “tough” time, hardly returning immediately from the many projects he embarked on. Working hard. I am doing the right thing and will eventually make a difference in people’s lives. And that’s what keeps you going. ”
Beyond the budget, future challenges include publishing an updated ‘integrated review’ of UK foreign, defense and security policy. This will be announced while Sunak is in San Diego with Joe Biden and Australian leader Anthony Albanese. The second half of the month will see a very important update on interest rates and inflation, indicating whether his mandate to ease the strain on the state’s finances is working. “It’s been a good week,” said one minister, reflecting on the prime minister’s recent foreign policy victories. “But we need better weeks to come.”
