DOMINIC LAWSON: Boris Johnson ducks paying his own bills. No wonder he doesn’t worry about yours
To be Chancellor of the Exchequer is never a barrel of laughs. Even less so now when — largely as a result of the economics of the coronavirus pandemic — output has plummeted and public debt is soaring.
So it is a tribute to Rishi Sunak’s remarkable ease under pressure that he was able yesterday to joke about his next-door neighbour in Downing Street: ‘I should take his credit card away.’
But the Prime Minister’s insouciant attitude to the public purse is not a laughing matter — as Sunak must know better than anyone. That will become clear to every taxpayer in the land when the bills have 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 windscreen
Debt repayment is not, however, something that Boris Johnson has ever taken seriously in his personal life. That is a private matter between him and his bank manager.
But if it characterises his conduct as First Lord of the Treasury, then that is properly an issue of the greatest public concern.
Readers might recall that when a row Johnson had with his partner, Carrie Symonds, was leaked in June last year to the Guardian by an eavesdropping neighbour, she was allegedly recorded accusing him of having ‘no care for money’.
And the photos of his car outside her flat at the time showed what she might have meant. It was festooned with unpaid parking tickets.
This was not down to the peculiar stresses of that time (Johnson had just launched his campaign to lead the Conservative Party).
The editor of GQ magazine, Dylan Jones, revealed in 2008: ‘I have employed Boris Johnson for eight years as GQ’s motoring correspondent, and even though he’s probably cost the company £5,000 in parking tickets, I wouldn’t have him any other way.’
Again, that was a private matter between Johnson and his employer: but when he’s the man with ultimate responsibility for the national finances, we might well decide that ‘any other way’ would be an improvement.
That was certainly the view of Johnson’s old boss at the Daily Telegraph, Max Hastings.
Sir Max has never quite got over the fact that when they had a £1,000 bet over the outcome of the 2010 general election, and Johnson lost, he sent his former editor a letter with the words ‘cheque enclosed’. But there was no cheque.
Obviously, the colossal borrowings which the Government has incurred during the Covid crisis, in common with other administrations across the Western world, are not for Johnson’s own pleasure.
Much of the staggering £350 billion bill is to pay for the costs of the furlough scheme, which has been vital for tiding businesses and employees over during the periods of lockdown.
It is a tribute to Rishi Sunak’s remarkable ease under pressure that he was able yesterday to joke about his next-door neighbour in Downing Street: ‘I should take his credit card away’
Without this, unemployment would have risen to truly shocking levels — and that, too, would have had dire effects on the national balance sheet, as well as on the lives of millions.
But the truth is that it doesn’t take a global pandemic to get Johnson to run up bills like a man who has just won the lottery (and, in a way, becoming PM was Boris Johnson’s version of the jackpot).
For example, he went against the urgings of his transport adviser at No 10, not to mention his then closest aide, Dominic Cummings, and pressed the accelerator on the HS2 rail project — even though he had been vociferously against it himself before entering Downing Street.
Its cost had risen from the original estimate of £30billion to £56billion, and then — allegedly the ‘final estimate’ — to £107billion. At that figure, it is not just the most expensive infrastructure project in our history, it also promises to be the least justifiable on all conventional measures of cost-benefit analysis.
As Sir Simon Jenkins, a British Rail board member from 1979 to 1990, observed: ‘HS2 has been opposed by virtually every parliamentary and official report I have read since 2010 … HS2 no longer has anything to do with trains, let alone economics, politics, or the north-south balance. It is about Boris Johnson.’
When refusing to shelve the project last February, Johnson himself justified it by saying that Britain should have the ‘courage to dream’. Lovely. But it will be a nightmare paying the bills, which will carry on flooding in long after Johnson himself has left office.
Mr Johnson and his old boss at the Daily Telegraph, Sir Max Hastings (pictured), had a £1,000 bet over the outcome of the 2010 general election
Johnson’s time as London Mayor gave us a warning of the consequences of his love of what the French like to call ‘grand projets’.
The ‘Garden Bridge’, for which he managed to persuade the then Chancellor George Osborne to fork out £30million of taxpayers’ money — after the Mayor had failed to meet his original promise of raising all the money privately — saw its estimated costs spiral to £200million, before it was abandoned by Johnson’s successor at City Hall.
It is certainly true that the national Government — of which Boris Johnson is in charge, however erratically — can now borrow at astonishingly favourable rates of interest.
The Debt Management Office recently auctioned £500million of index-linked bonds with a 2056 maturity for a return of RPI minus 2 per cent.
But as the director of the Institute for Fiscal Studies, Paul Johnson, warns: ‘It seems to be able to borrow as much as it wants pretty much for free. This makes it the perfect moment to make valuable investments. But there are big risks.
‘The temptation towards wasteful spending is all too evident. That would make us worse off. And if interest rates do start rising without a corresponding increase in economic growth, then we could easily descend into a horrible fiscal spiral.’
And as the Mail sets out today in an eye-opening list of almost bizarre expenditures, the State has a perennial propensity for wasting money, and not just when normal procurement processes were sidestepped during the frantic attempts to get hold of 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 invigilate profligacy in spending does that, it hardly inspires confidence that it can control the expenditure of other departments which seek only to increase their own budgets.
The director of the Institute for Fiscal Studies, Paul Johnson, warned if interest rates do start rising without a corresponding increase in economic growth, then we could easily descend into a horrible fiscal spiral
This, actually, is the institutionalised problem facing Sunak, and which has dogged all Chancellors.
When asked to find economies, every spending department is expert at shroud-waving, and no Cabinet minister will demand his colleagues cut back because he (or she) will want their support across the Cabinet table on a host of other issues.
So the Chancellor will have had little support from colleagues in any attempt on his part to block the PM’s decision last week to give the Ministry of Defence a real-terms 4 per cent budget increase over each of the next three years.
And if there is any Government department which has, over the decades, showed itself a brand leader in wasting billions, it is the MoD.
That, however, is little more than margin-of-error stuff compared to the wastefulness which the PM licensed last week with his drive to so-called ‘carbon net zero’ (however good it will make him look on the international stage, when Glasgow hosts the UN climate change summit next year).
For example, replacing all our boilers with so-called ‘air-source’ heat pumps will not just cost at least four times more than gas-fired ones: the enormous tax-funded subsidies required will be for products less efficient at heat generation than those we currently use in our homes.
Public expenditure to fund more expensive energy (for example, with wind turbines replacing gas ones for industrial use) is what economists call ‘malinvestment’.
Making our businesses pay more for their energy than international rivals is the route to penury: and, even if other nations were to do the same, it would still, in the end, lead to job losses rather than the employment gains which Boris Johnson boasts it will achieve.
Borrowing yet more billions to decrease industrial productivity is, truly, the economics of the madhouse.
And the scariest bit is that I don’t think the Prime Minister is remotely concerned. Any more than he was by those unpaid parking tickets.
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