Rishi Sunak may have spent the past four days attending the G20 summit in Indonesia, but his fingerprints will be all over chancellor Jeremy Hunt’s Autumn Statement.
Not since Gordon Brown handed over the Treasury to Alistair Darling in 2007 has a prime minister had such a detailed knowledge of the policy options available to a chancellor at a fiscal event.
For Darling, the experience of having Brown as a back seat driver was excruciating, but officials close to preparations for Thursday’s Autumn Statement said Sunak and Hunt have so far avoided that psychodrama.
In normal circumstances Hunt would not have been Sunak’s first choice as chancellor. Indeed Hunt, former chair of the House of Commons health committee, infuriated Sunak during the Covid crisis over his enthusiasm for lockdowns.
But Hunt was already installed at the Treasury — appointed by Liz Truss as her economic policy disintegrated — and had stabilised financial markets by starting to unwind her disastrous “mini-Budget” of September 23 that focused on £45bn of unfunded tax cuts.
Sunak kept Hunt on, wanting to avoid causing more market uncertainty. One Tory MP said meeting the reassuring Hunt at the Treasury was like “visiting a health spa” after the turmoil unleashed by former chancellor Kwasi Kwarteng.
Number 10 officials said Hunt’s performance and commitment to fiscal discipline have impressed Sunak.
Over the course of around a dozen meetings, held in the cabinet room at 10 Downing Street, Hunt and Sunak have drawn up the Autumn Statement from a menu of about 100 options compiled by Treasury officials.
Sunak, chancellor from February 2020 to July 2022, knew most of the options from previous fiscal events and let it be known from the outset he would be fully involved in compiling the Autumn Statement.
Indeed the decision to postpone the fiscal event from October 31 to November 17 was taken explicitly to allow Sunak, officially first lord of the Treasury, to work through the options with Hunt.
“They’ve been working well together,” said one official close to the preparations. “This is a government plan — Rishi has the experience, but there has been a shared approach. It has been very professional.”
The relative harmony comes largely from the fact Hunt and Sunak agree on the policy: a fiscal contraction of more than £50bn a year intended to calm markets, tackle inflation and bring down interest rates. The chancellor is due to unveil an array of tax rises and public spending cuts.
“We got a glimpse over the summer of what can happen if we don’t get these things right and we want to make sure that we do and we have stability and confidence in the UK’s economy,” Sunak said at the G20 summit in Bali before heading back to London.
This alignment in the interests of prime minister and chancellor is not always the case. For example, when Sunak was at the Treasury he frequently clashed with Boris Johnson, who wanted to increase spending.
Sunak, although he has been integral to the writing of the Autumn Statement, has also respected Hunt’s role. “Jeremy is in the driving seat on this one,” said one ally of the prime minister.
Darling recalled in his memoirs how difficult it was dealing with Brown, who had been chancellor for 10 years under Tony Blair. He wrote how he was the victim of “debilitating” attacks by Number 10, which accused Darling of “exaggerating” the effects of the 2008 financial crisis.
Another feature of the Autumn Statement preparations has been the good relations between officials, many of whom became friends in the early 2010s when they helped David Cameron and chancellor George Osborne launch the “age of austerity”.
“It’s Osborne redux,” said Pat McFadden, Labour’s Treasury spokesman, drawing parallels between the spending curbs introduced by Osborne and what Labour is calling “austerity 2.0” being planned by Sunak and Hunt.
Rupert Harrison, now an economic adviser to Hunt, was Osborne’s chief of staff. Eleanor Shawcross, head of policy in Number 10, was Osborne’s deputy chief of staff. James Bowler, permanent secretary at the Treasury, was Cameron’s principal private secretary.
Meanwhile Dan York-Smith, Treasury director of budget planning, and Clare Lombardelli, chief economic adviser, are both Osborne-era veterans and have been closely involved in the process. All are redolent of the “Treasury orthodoxy” decried by Truss.
But ultimately it is Sunak, who said he had spent more time on the Autumn Statement than any other issue since becoming prime minister, whose reputation hangs on what Hunt delivers on Thursday.