Tensions are reportedly increasing between Boris Johnson and Rishi Sunak over the Prime Minister’s myriad of recent spending promises.
Two recent major spending announcements – of a new Royal Yacht and a new G7 green infrastructure programme for developing countries – were reportedly announced by Johnson without even consulting Sunak or the Treasury.
The green infrastructure plan, dubbed the green Marshall Plan, has seen the government commit to spending billions of pounds on international infrastructure to combat China’s Belt and Road Initiative.
One Whitehall official told the Sunday Times: “No one in the Treasury had a clue about the new Marshall Plan until it appeared in the media.”
The Sunday Times reports there is a large row between departments over who will pay for the £200m royal yacht.
Number 10 announced plans to build another Royal Yacht after the last one was decommissioned in 1997.
The Royal Family have said behind closed doors that they do not want the new ship.
One official said: “It was given to [Michael] Gove to sort out, but it became clear that under procurement rules it could only be built here if it was a navy thing with a bunch of fake weapons on board. So Gove passed it on to the MoD. The Treasury stayed out of it.”
Sunak is reportedly concerned about the government’s upcoming spending promises this year, which will be added to the predicted £350bn Budget deficit for 2020-21 – the highest relative deficit since World War II.
He announced a series of corporation tax rises and stealth income tax rises in the Budget, which will all be implemented by 2023.
However, there are now a raft of new spending promises that will come this year through the Cop26 climate summit in Glasgow that are set to run into the tens of billions at least.
There will also need to be spending put aside for this year’s comprehensive spending review.
It comes as the chancellor labelled himself as a “fiscal conservative” in an interview with GB News this week.
“Of course, I’m a fiscal conservative… it’s not my money, it is other people’s money and I take my responsibility for that very seriously,” he said.
“But it is important to me to deliver on our commitments in the manifesto to invest in public services to spread opportunity around the country.”
Commenting on the spending row, shadow Treasury minister Bridget Phillipson said: “Incredibly, the Prime Minister has been the driving force behind huge amounts of wasted money and vanity projects without consulting his Chancellor.
“Uncosted promises are starting to catch up with both him and the Chancellor. And they’re leading to even more poor short-term decisions that store up long term problems – like blocking crucial investment in our children’s future and recovery.”