Andrew Lilico

One of the key dividing lines of the current Tory leadership contest concerns economic policy. The gap between the candidates is not actually very large, but of course political arguments often magnify small differences. And in this case there quite an important philosophical difference that could have significant consequences over the longer-term. Broadly speaking, Rishi Sunak is the candidate of economic continuity – how could he be otherwise, given that until a couple of weeks ago he was in charge of economic policy as Chancellor of the Exchequer. His plans involve large tax rises. Even before inflation raced ahead of expectations his plans scheduled the total tax rate rising to its highest level since 1948.

The past six years have been a turbulent and controversial time in British politics. Through them all, one person consistently delivered progress, not deflected by the chaos around her. As others made headlines, Liz Truss made deals. Having been environment secretary under David Cameron, Truss was justice secretary and lord chancellor then chief secretary to the Treasury under Theresa May, before moving on to become trade secretary, minister for women and foreign secretary under Boris Johnson. Experience at Environment, Justice, the Treasury, Trade, Women and Foreign Affairs provide the perfect background of experience – a suite and breadth that no other candidate in the race comes even close to matching. A Truss administration will be a conservative administration.

Boris Johnson has been given so many second chances. He hasn’t taken any of them. Let’s start with his voting for Theresa May’s terrible Brexit deal. Despite this, when Theresa May resigned he was backed by Leavers and became PM. Having become PM he didn’t, as he should have done, back a no deal, and instead negotiated a revised version of May’s deal. Though a huge improvement on her version, it was far from perfect. Leavers backed him nonetheless and he won a large majority in the general election. And for having defeated Corbyn and achieved Brexit he will be remembered as a hero by many Conservatives. Barely a couple of months after the general election, Covid arrived.

Most people date the beginning of Boris Johnson’s current woes to the start of the partygate scandal, and especially to the revelations from 10 January 2022 onwards about the ‘bring your own booze’ event that Johnson himself had attended. But Johnson’s problems can also be seen as having started at an earlier date and from a different source. In mid-December Lord Frost resigned from Johnson’s Cabinet, rejecting the additional restrictions proposed in response to Omicron, a few days after Steve Baker and the Covid Recovery Group had led about 100 backbenchers in a revolt against new measures. This meant Boris felt he had to take proposals for a Christmas 2021 lockdown to Cabinet, where it was rejected.

Labour MPs and parts of the media are currently exploring, as part of the partygate scandal, whether if you repeat often enough that someone has lied, you can make that an accepted fact, even if you do not have a shred of evidence or reason to believe it. The latest example came in the Commons this week when MPs referred Boris Johnson to the privileges committee for potentially misleading parliament. The problem is that Boris Johnson did not lie about having received birthday greetings from work colleagues between work meetings. His team literally briefed the event to the press on the day it occurred. In June 2020, during the height of lockdown, the Times reported that Boris Johnson had received a cake for his birthday. No one noticed.

Keir Starmer, aided and abetted by Boris Johnson’s many internal enemies within the Conservative party, has managed to get into the public consciousness the idea that if Boris Johnson attended a ‘party’ during lockdown, he should resign. There are a number of good reasons that the Tory party might feel it was time for a new leader, but the notion that attending an at-best semi-licit drinks event in one’s own back garden counts as a grounds to remove a prime minister seems to me to be wildly disproportionate. People say: ‘Those that make laws should not break them.’ And, of course, that it correct. But it doesn’t follow that any PM that broke a law ought to resign because of it.

Today the government has said that for the next three weeks it will be mandatory to wear masks in shops and on public transport, pending a review. It was already mandatory to wear a mask on the tube, as a condition of travel. So to avoid mixing up ideas, let’s focus on the new mandate from the government: that people will have to wear masks in shops. Imposing a requirement that anyone entering a shop must wear a mask, whether the shop wants to accept them or not, is a straightforward imposition on human liberty. We have accepted huge infringements upon our liberties over the past 21 months.

The Treasury's analysis of the short-term impact of Brexit offers us two scenarios for the two years following the referendum: a base ‘shock’ and a ‘severe shock’ scenario. The base case means 3.6pc less economic growth in the two years following Brexit, with inflation up 2.3 percentage points and house prices down 10pc. A first thing to grasp is the connection between the scenarios in this report and those in the previous Treasury report on the longer-term impact of Brexit.

Dear David, From Q2 1979 to Q1 1981, quarterly real GDP fell in the UK by 5.5%. Unemployment rose rapidly, from 1.4m in Q2 1979 to 2.4m by the end of the recession, then continued rising through to its peak of 3.3m in 1984 – 12% of the workforce. Unemployment stayed above 3m for 51 straight months. This is the pattern economists expect in a serious recession. Unemployment rises, then stays persistently high, falling back only well into the recovery. It has also been the experience of much of the developed world since the Great Recession of 2008/09. So, for example, whereas US unemployment was below 5% in 2007, it rose to about 10% in 2010, falling back only gradually over several years thereafter. Similarly, in Spain unemployment rose from 8.4% in 2007 to 27% in 2013.

Recent events in the Eurozone have led a number of commentators to suggest that we are nearing some repeat of the financial crisis that followed the nationalisation of Fannie Mae and Freddie Mac in August 2008 and the subsequent (and consequent) bankruptcy of Lehman's. In my view, the current situation is rather different from that in 2008, but matters could turn out much worse.

Public spending is currently accelerating at an unprecedented pace — more swiftly, even, that during the total loss of control during the 1970s.  Spending is due to rise £120bn, 20%, in just three years from 2007/8 to 2010/11, taking it from 41% of GDP to above 50% — a much more rapid rise than in other parts of the world, lifting us from well below the EU average to well above.   The considerable majority of this rise is not the automatic result of the recession (extra unemployment benefits, etc.) – only 38% takes this form.  Neither is it any kind of “public works” programme – only 6% is extra capital spending.  Instead, the vast majority is extra consumption spending.