With a gloomy economic outlook, Rishi Sunak will need to learn the lessons of the past to impress voters

The replacement of Sajid Javid as chancellor may owe more to the exercise of political control, or even to misunderstanding, than to real differences in fiscal policy. But the change does challenge the authority of the treasury, writes Vince Cable

The new chancellor has been criticised for his lack of experience (Getty)

It was Gordon Brown who coined the phrase “prudence with a purpose” to describe those long-forgotten days when an incoming Labour government was trying to impress its new, previously Conservative, voters and the markets. It put on a display of fiscal rectitude based on what – at the time – seemed draconian controls on public spending. The Treasury was never happier or more powerful.

From New Labour to the new Conservatives, there is the opposite problem: how to satisfy a previously Labour constituency of the voting public, who have been promised an end to austerity and a Brexit dividend. The replacement of Sajid Javid as chancellor by the untested Rishi Sunak may owe more to the exercise of political control, or even to misunderstanding, than to real differences in fiscal policy. But the change does challenge the authority of the treasury.

Gordon Brown’s more enduring legacy was a set of fiscal rules to provide a macroeconomic framework within which the treasury should set its tax and spending commitments. The coalition’s establishment of an independent Office of Budget Responsibility (OBR) went on to reinforce his rules. The OBR was charged with marking the government’s exam papers, to stop the budgetary cheating of which Labour was accused in its later years.