Truss warns fellow ministers over spending demands

Truss warns fellow ministers over spending demands

Ministers have been told they should be more aware of the tax implications of their calls for spending increases amid a row over defence budgets.

Liz Truss, the second in command at the Treasury, said her colleagues needed to be clear that most budget increases would have to be paid for by tax rises.

Defence Secretary Gavin Williamson has reportedly demanded £20bn extra after the NHS was promised a similar sum.

But Ms Truss told an audience in London the boost for the NHS was a one-off.

Over the weekend the Mail on Sunday reported that Mr Williamson threatened to end Theresa May’s leadership if she did not provide more money for the armed forces.

Many Tory MPs want defence spending as a share of GDP to increase from its current level of just over 2% to at least 3% in the face of growing threats, including from Russia.

A number of former senior officers have warned current defence plans are unaffordable.

Lord Houghton – chief of defence staff between 2013 and 2016 – told the BBC on Tuesday the UK was to an extent living a lie.

But Ms Truss who, as chief secretary to the Treasury, is Chancellor Philip Hammond’s deputy, has warned cabinet colleagues that it is not macho to demand more funding.

Speaking at the London School of Economics, she said the £20bn a year budget boost for the NHS in England up to 2023 announced by the prime minister last week would not be replicated elsewhere.

My point to my colleagues is that any additional spending will necessarily – most likely – lead to additional taxation and we should be honest when we have that discussion, she said.

We need to keep tax as low as possible.

The chief secretary to the Treasury is usually the government’s enforcer – ensuring that the purse strings aren’t loosened too radically.

It’s a role that Liz Truss seems to relish, as she told an academic and business audience that she wanted to keep taxes as low as possible. And amid wrangling for cash by her cabinet colleagues, she emphasised that extra cash for the NHS would be a one-off.

But while she wanted to see more discipline in the public finances, she seemed to depart from collective cabinet responsibility on another issue.

Poking fun at Environment Secretary Michael Gove’s crackdown on wood-burning stoves and plastic straws, she said was concerned that there was too much red tape and it wasn’t the government’s place to tell people what to do.

Next week the cabinet will have an away day at Chequers – the PM’s country retreat. She will be hoping on that occasion they will debate any differences only behind closed doors.

Her comments echo those of former minister George Freeman, who said that the Conservatives risked losing the next election if they made a series of unfunded spending commitments.

We cannot have this process done by cabinet ministers going to the press and briefing against the prime minister, and putting their bids in early, he said.

I think if we lose our reputation for economic competence, if we can’t show that we are managing the public finances properly… and we go down the road of big tax rises, big spending spree, anti-business, I fear we will lose and we’ll deserve to.

If we look like Corbyn-light the public will conclude they are better off voting for the real thing.

The government has yet to spell out where the extra money for the NHS will come from although Mrs May has indicated that the public will have to make a contribution and the overall tax burden will rise.

Mr Hammond will set out the total public spending framework for the years beyond 2020 in this autumn’s budget, before deciding department-by-department allocations next year.

News Source BBCNews

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