Hunt gets tough on public spending

Liz Truss was in an apologetic mood again this morning when she sat down with her cabinet ministers. She told them that the government had 'gone too far and too fast with the mini-Budget' and that this had been, in the words of her spokesman, 'exacerbated by global factors with inflation rising around the world'. 

Her opening remarks included a pledge to be 'honest with the public that times would be tough but that by addressing long-standing issues now, we can put the country on a stronger path for the future'. One of the (myriad) problems Truss has had up to this point is a refusal to be honest about what choices she really needs to make. It is, though, possible that she has not been honest with herself, given the vehemence with which she said only last week that there would 'absolutely' not be public spending cuts.

The more important contribution to this morning's meeting came from the new Chancellor Jeremy Hunt. Hunt told ministers that 'public spending would continue to rise overall but that departments will continue to be asked to look at finding ways to save taxpayers' money, with public spending standing at around 1 trillion pounds currently'. 

He added that 'this work should focus on areas which would not affect the service the public receives'. This kicked off what was described as a 'lengthy discussion' about public spending. Anyone who has had the pleasure of reading old cabinet minutes over the decades will know that 'lengthy discussion' tends to be civil service shorthand for 'big row'.

We have some idea of who might have been making the most vocal contributions to that 'lengthy discussion', given the war being waged by defence ministers on any suggestion that their spending pot will not meet 3 per cent of GDP by 2030. James Heappey has threatened to resign if that promise isn't kept. His boss Ben Wallace has been similarly robust about the need for the Treasury to stick to this in a continuous manner, rather than loading the rise towards the end of the period. 

Perhaps, then, it wasn't a surprise that Downing Street emphasised that the Prime Minister had made that commitment. But more striking is that the Prime Minister's official spokesman did not stick to the promise to raise spending to 2.5 per cent by 2026. The spokesman said: 'We are obviously committed to maintaining the UK's position at the forefront of Nato, that's why the PM committed to raise defence spending to 3 per cent of GDP by 2030. The shape of that increase will be set out at future spending reviews in the normal way.' That line 'the shape of that increase' will have set raid sirens blaring in the MoD.

The triple lock on pensions didn't get even this kind of carefully constructed protection, though, with the spokesman merely saying that the government recognised how vulnerable many pensions were. And while Hunt has said departments need to consider cuts that don't affect the services people receive, in many cases it is difficult to see where the fat is that can easily be cut. 

What is likely – as Hunt will well know from his time in the Department of Health – is that capital projects and investment in improving services for the future are dropped. That still has a dramatic impact. Truss herself knows this from her recent local radio run-in where she was unable to say if she could do anything to help her local hospital, currently being propped up with stilts. 

Capital investment is so behind in areas including the health service that not doing something will still quite quickly have an impact anyway. Each Secretary of State will be making that point to Hunt in what are going to be even lengthier discussions than today's cabinet meeting. Whether Truss will have any input isn't clear.