Theresa May to use last days as PM to make series of policy moves
Theresa May is expected to press ahead with a series of policy announcements potentially costing billions of pounds in her final days in Downing Street, in the face of reservations from the chancellor.
The prime minister is keen to salvage some semblance of a domestic legacy from her three-year stint in No 10, which has been overwhelmingly dominated by Brexit.
May’s spokesperson said on Friday: “You heard from the PM recently in setting out that for the remainder of her time in office she will be focused on delivering and building on the domestic agenda that she has put at the heart of her premiership, since she became prime minister.”
May has already responded warmly to the Augur review of higher education funding, suggesting that maintenance grants should be restored. However, Whitehall sources suggest No 10 has clashed with the Treasury about making costly pledges.
Philip Hammond has repeatedly made clear that with a full-blown spending review coming up in the autumn, decisions should be made in the round. Giving evidence to the Treasury select committee in April, Hammond was asked about whether extra resources could be found for key priorities before the spending review kicked off.
“It would be possible, but I do not think it would be a good idea at all,” he said. “The point of a periodic spending review is an opportunity for government, parliament and society more widely to debate priorities, to look at how we allocate scarce resources across the vast range of potential avenues for spending those resources, and to decide what our priorities are for the next period and how we want to allocate resources.”
However, that approach did not apply to the £20bn of extra funding for the NHS May announced last year.
Hammond is also nervous about the idea that some of the £27bn of “fiscal headroom” he set aside for Brexit contingencies could be spent, despite the fact that none of the frontrunners for the Tory leadership have ruled out no deal.
Asked whether May had clashed with the chancellor, the prime minister’s spokesperson said: “They meet regularly to discuss spending priorities. I wouldn’t get into the nature of the discussions.”
A Downing Street source played down the idea that any announcements would amount to a spending splurge, saying: “We’ll want to keep delivering for people, but what we haven’t said is whether/how much that costs.”
No 10 slapped down the chancellor on Thursday, after the Financial Times revealed a leaked letter in which he had said May’s promise to hit net zero carbon emissions by 2050 would cost £1tn in lost economic output.
“Obviously, I’m not getting into the contents of the letter, but broadly there are a lot of figures out there on this issue that don’t factor in the benefits or consider the costs of not doing this,” said the prime minister’s spokesperson.
Hammond and May have had a rocky relationship. During the 2017 general election campaign, she pointedly declined to say whether he would continue as chancellor, while he was standing alongside her.
The chancellor once suggested “fiscal”, when asked to choose one word to describe himself. But he has repeatedly irritated colleagues by reining in their plans. One cabinet minister described his reticence about May’s final announcements as: “Eeyore strikes again. He just likes to shoot everything down.”
May will resign formally as Tory leader on Friday: a move that will be cemented by a private exchange of letters with the chairs of the backbench 1922 Committee. However, she will remain in place until her successor is chosen, a process due to be completed in the week beginning 22 July.
Heather Stewart and Peter Walker