John Redwood certainly has a bee in his bonnet over former Chancellor Rishi Sunak.

Unusually, Redwood has been tweeting several times daily in Trumpian style over which candidate — Sunak or Liz Truss — is better as the future leader of the Conservative Party and our new Prime Minister.

He has also continued to keep his readers updated in his eponymous diary.

On July 20, 2022, the final day of Conservative MPs voting for leadership candidates, he tweeted:

Later that day, he wrote a brief diary entry, ‘Then there were two’:

I am delighted Liz Truss will be in the final with Rishi Sunak. I want a change of economic policy as readers of this site will know. Liz Truss will give us that change. Rishi has accepted Treasury and Bank advice which has given us a high inflation and if unaltered will give us a recession next year. We can do better.

Redwood has been an MP since Margaret Thatcher was Prime Minister. Not only does he understand her monetary policy but also the way Treasury and Bank of England forecasts have gone wrong over the past 40 years. He advised Thatcher in the middle years of her long premiership.

Boris Johnson also understands that the Treasury gets things wrong. In his final PMQs on Wednesday, July 20, he gave advice to his successor, saying (emphases mine):

I love the Treasury, but remember that if we had always listened to the Treasury, we would not have built the M25 or the Channel Tunnel.

That day, the OBR (Office for Budget Responsibility) came out with a revised forecast.

On July 21, Redwood wrote ‘Some funny numbers from the Treasury and OBR’:

The OBR has had to explain why it was so far out in its forecasts of the deficit and borrowings last year. They have written:

“Our latest forecast for (Central government borrowing) 2021-2 is £48.3bn below the October forecast and £131.2bn below our March 2021 forecast (the Budget)”. They accept they underestimate tax revenues by a massive £77bn and overstated state spending by £48.7bn. It should be easier to forecast what you spend when you are running the spending controls.

We can all make mistakes. Forecasting is difficult. What is more difficult to forgive is that this was not the first time they have underestimated the revenues and overstated the deficit. Worse still is they used their precise forecasts of revenue and deficit to tell the Chancellor he needed to raise more taxes to reduce the gap between spending and taxing. It turns out they need not have asked him to do that as the numbers were so much better than the numbers they tried to create with tax rises.  So when I am asked how do we pay for the tax cuts, the first answer is we are so far ahead of plan there is no problem. The second answer is if you cut the right tax rates to a sensible amount you can end up with more growth and more revenue, not less.

The Treasury also needs to come clean about the debt interest. They have been using their current high figure of £83bn which includes index costs on the repayment of inflation linked debt which does not entail making any cash payments before redemption. They use this figure to scare politicians into accepting more austerity to control the debt interest. What they omit to point out is on their definition of debt interest they forecast a collapse in the cost of it to £46.7bn by 2024-5. That is a fall of £36.3bn or 44% in debt interest.

The Treasury has a tradition of overstating deficits when there is good growth and understating them in recession. There is also a danger their policy advice based on very wrong forecasts could drive us unnecessarily into recession.

Redwood tweeted that our current inflation is likely to be temporary:

As soon as Truss and Sunak were the final two contenders in the Conservative Party leadership contest, The Times endorsed Sunak.

Much of the media have also swung behind Sunak, except for the more conservative news outlets which feature more articles on Liz Truss’s candidacy and Kemi Badenoch as the future of the Conservative Party, even though she was eliminated from the leadership contest.

Redwood tweeted:

True.

The Remainer media have attacked Truss’s proposed policies. Sunak’s softness on the EU are why the media back him. They want a return to the EU:

Sunak has been pushing the line that Margaret Thatcher had an initial high tax policy that worked well. Therefore, Sunak is high tax, in a Thatcherite mode. In reality, once Thatcher got new advisers, she began cutting taxes, which brought economic growth.

Redwood tweeted:

Redwood believes that Liz Truss has the Thatcherite economic policy in this contest:

Redwood had more to say about Sunak’s performance while he was Chancellor:

I particularly enjoyed this next tweet, in which Redwood compares Sunak to Labour Chancellor Gordon Brown, who later became Prime Minister, succeeding Tony Blair:

Redwood said that he tried to advise Sunak on the economy, but to no avail:

On Friday, July 22, Redwood correctly predicted that Rishi would send a message of panic:

Sure enough, the next day, Rishi said he wanted to declare a state of national emergency:

We can only hope that Redwood is right in saying that panic puts off voters:

Sunak made the statement in Grantham, Margaret Thatcher’s home-town. Redwood finds it curious that Sunak never mentioned an interest in Thatcher until this leadership contest:

As I write on Monday afternoon, I will look at that day’s BBC debate between the two candidates in a separate post.

Before the debate, Redwood shared his thoughts:

In closing, Redwood reiterates why Liz Truss is the better candidate:

Even though I have no vote in this contest, Liz Truss has accomplished far more in trade deals and foreign policy than Rishi Sunak as Chancellor. His time in No. 11 was disappointing for the most part.

Conservative Party members will receive their ballots early in August, enabling them to vote by post or online. The deadline for them is August 2. A new Prime Minister should be in place by September 5.

Advertisement