Key ally Rishi Sunak says Rishi Sunak’s spending “marks a shift within Tory philosophy” of shrinking the state’s size

  • Simon Clarke stated that there has been a shift of economic philosophy among Tories
  • Leading think-tanks believe that Sunak’s spending has little to do with Covid. 
  • Under the Government, the state’s size is expected to reach its highest point in decades.
  • The Budget was a major departure from the Conservative economic policy.

A key ally of Rishi Sunak yesterday proclaimed a ‘philosophical shift’ in Conservatism as experts suggested the pandemic was not the driving factor behind the Chancellor’s huge spending.

Simon Clarke, Chief Secretary to Treasury, stated that public spending was increasing because the Government believed that the state had a role in delivering its policy priorities.

He acknowledged that this was a departure from the Tory orthodoxy during George Osborne’s time, when he reduced the state’s size.

Mr Sunak predicts that the state’s size and tax burden will rise to their highest levels in decades.

At times the Chancellor has appeared to suggest that the Government’s actions have been forced by the Covid pandemic, the biggest economic shock in 300 years.

Simon Clarke (right) and Rishi Sunak (left) pictured before Wednesday's Budget

Simon Clarke (right), Rishi Sunak(left), pictured before Wednesday’s Budget

But yesterday the Institute for Fiscal Studies said that 80 per cent of the extra spending announced in Wednesday’s Budget had nothing to do with the pandemic.

The economists said the majority of the spending increase was the result of the Chancellor’s decision to increase spending on health, social care and other priorities regardless of the pandemic.

On Wednesday, Mr Clarke explained the changes in the Tory philosophy to BBC Newsnight.

‘We recognise that the state has a role to play in achieving some of our policy priorities and the Chancellor was very open about the fact that this is something that is a philosophical shift, if you like, from the Cameron-Osborne,’ he said.

Asked whether the new Conservatism was ‘high spending and high taxes’, he said: ‘What we want to see is to get the economy turbo-charged, to unlock the productivity and to deliver growth more evenly across the UK.

“This requires some upfront spending. We are not shying away from the fact we are making big, big calls in terms of the investment in our infrastructure.’

The Budget was a departure from the usual Tory doctrine of low taxes and a small state

The Budget was a departure form the Tory doctrine of low taxes, and a small state.

Mr Clarke has backed the Chancellor's pivot away from traditional Tory economic policy

Clarke supports the Chancellor’s move away from Tory economic policy

Tory backbencher John Redwood said: ‘I don’t quite know what the Chief Secretary was on about because the Chancellor was very clear that Government can’t do everything. He stated that we need to have lower taxes and a smaller country at the end.

‘I want to see first-class healthcare and education but we also need to ensure productivity and value for money. I disagree with the Government’s tax increases, such as the national tax rise, which is a tax that is on jobs.

‘I am on the Chancellor’s side: The economy needs to get back to the kind of policies to bring us faster growth. And we will get faster growth if we don’t hit people’s incomes quite so much, like we are doing with this NI rise.’

The IfS also said that if things go right, Mr Sunak could be able to cut taxes by £7billion before the next election thanks to a war chest he will have built up. On Wednesday the Chancellor said his ‘goal’ was to ‘reduce taxes’ – even though he has introduced the highest tax burden since the 1950s.