Sunak has the foresight to see the positive future before us.

(This is a column published in the Journal in advance of the Autumn Budget 2022)

This is the first of my monthly columns in 2022 that I feel able to offer fulsome support to the UK Prime Minister. Earlier in the year, I offered qualified support to Boris Johnson with ‘partygate’ causing a real concern about his executive control, then having campaigned for Rishi Sunak to become Conservative leader I felt I couldn’t be enthusiastic about Liz Truss. My reservations have been proved right, in the space of a few weeks Rishi’s summer warnings about ‘fairy-tale’ economics came true and as a result he has become Prime Minister.

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He is one of the few Prime Ministers in recent times who understands economics. Gordon Brown certainly got the theory, but Rishi gets the granular detail; as Chancellor he had a Bloomberg information feed in his office. He is famous for wanting proper data on which to make credible and correct decisions. He is often knocked for being rich, but his wealth came from managing money in the City of London to benefit his clients, investors and pension funds. Now his ‘clients’ are all of us, the taxpayers. If he gets this budget right – hard as that may well be – we will all be better off in the long-term. If Rishi is the City’s choice for Prime Minister, they made their pleasure clear by effectively knocking one percentage point off the cost of the Government’s borrowing costs – resulting in a reduction of billions of pounds a year in the interest we all pay on our national debt. These interest rates are feeding through to the fixed rate mortgages that are re-emerging after many were withdrawn under Liz Truss. Furthermore, The Bank of England was given a budget of ￡65billion by the Truss Government to stabilise the gilts market, it has barely used this budget and the gilts it did buy could be sold at a profit in due course if the budget works.

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Today is the most important day of Rishi’s political career. Every line item on the Government’s budget spreadsheet will be scrutinised by global financial markets. The City’s reaction to the proposals will be critical. Will Rishi and Chancellor Hunt get the balance right between taxation and reduced spending? Will the new Government flinch from trying to balance our books in a sustainable and affordable way? The media and political opponents will give voice to the vested interests that are affected most, from the public services that need to cut their spending to the people (probably people in business like me) who will end up paying the biggest tax rises. The lines of attack are already being drawn up. Labour is already talking about ‘austerity 2.0’; for many real people ‘austerity’ just means living within your means. For Labour it means defending the status quo and demanding no reduction in public spending, ever! It will claim energy firms, high paid bankers and entrepreneurs are greedy, while inefficiencies in the public services will be glossed over and grievances will be nurtured for pure political advantage.

I know Rishi, he wants an economy that can provide for our long-term. He realises that handouts in the pandemic and recent support for our energy costs need to be paid for. He told us at the time, but some of us were too busy counting our subsidies to listen. He also wants to reduce tax once the public finances have been stabilised. To do all this he has to endure personal attacks based on his family wealth or the types of shoes he wears. He can’t win those trivial arguments; but he must win the big arguments in order to save our country from ruin.

None of today’s difficult decisions should take away from some positive facts about our current situation. He are some thoughts to be going on with.

First, although we may all end up paying more tax, more of us are employed than ever. As Gordon Brown acknowledged, a job is the best form of welfare available.

Second, although there are predictions of a recession, we have not entered one yet. Some of our international competitors have. Taking tough decisions now could ameliorate the effects of a downturn.

Third, the North East is at the forefront of some really impressive new economic activity that will help our region in these circumstances.

To illustrate this last point, last week I played host to the Vice President of a US company that has just invested ￡100 million in our region: Turntide Transport. It makes electric powertrains for vehicles – not just cars but other vehicles that will become electric as the climate change rules begin to bite. Vehicles like those involved in construction or operating luggage collection at airports. I showed my friend around the region. He met people involved in driving the electric revolution and toured the Teesworks site where massive investments are currently underway, including the largest footprint factory in the UK (1million square feet) which is currently under construction as part of the massive Dogger Bank offshore wind project. He subsequently posted on LinkedIn. He said: “fossil fuel powered plants are being converted to a climatetech powerhouse region.” How right he is, viewed from his San Francisco office, our region is part of a bright green future for the world.

The economy presents real challenges to those in power today. But I really think that our new Prime Minister has the foresight to understand the positive future that is before us and can navigate the post-covid and Ukraine war related price shocks that have hit western economies. He deserves our full support.?