Boris Johnson is considering scrapping the fiscal rules written by the Treasury just months ago in a bid to increase spending in next month’s budget.
Ex-chancellor Sajid Javid wrote the rules into the Tories’ 2019 election manifesto in an attempt to exercise fiscal restraint amidst a swathe of spending pledges.
The primary rules were promises to have a balanced budget on day-to-day departmental spending by half way through the five-year term and to keep borrowing to fund infrastructure projects at 3 per cent of GDP or below.
This allowed the Prime Minister to pledge £100bn of infrastructure spending at the election, with £22m of it already earmarked for projects.
However, Johnson and new chancellor Rishi Sunak are now set to meet on Tuesday to discuss easing both of these rules, according to the Sunday Times.
Number 10 reportedly want to change the day-to-day spending rules to increase NHS and social care expenditure, while easing the capital projects rule would indicate that Johnson wants to push his infrastructure programme even further.
It has been revealed that Javid – who quit as chancellor on Thursday over a row about control over Treasury staffing – was informed of the plans on Tuesday last week, but pushed back against the move.
Speaking to the Sunday Times, a Javid ally said: “We came up with [the rules] because they are your friend.
“They force you to make choices. You can’t say everything is your priority.”
Johnson has also reportedly decided to scrap any possibility of a so-called mansion tax on high-value properties, after backlash from Conservative MPs, members and activists.
It was widely reported last week that Number 10 were considering the several wealth taxes, with some attributing the ideas to Johnson’s primary adviser Dominic Cummings.
The new look Treasury under Sunak will now look toward next month’s budget, which may be postponed from its original date of 11 March.
Speaking to Sky New today, transport secretary Grant Shapps indicated the new chancellor may need more time to get to grips with the role before delivering the budget.
“I know the budget plans are well advanced but I also know that Rishi Sunak, the new chancellor, may want time,” he said.
“I haven’t heard whether the date in March is confirmed as yet.”