Rishi Sunak has brought sanity back to the Tory Party. Confident, competent, technocratic even, he believes in sound money and, internationally, strong relationships with allies including the EU. He has had his hands tied with some of his Cabinet choices, but this will not last for long. His problem, however, is that his premiership has come too late.
Much ammunition to use against the Government
After 12 years of Tory government including five years of severe austerity, this clever, but thoroughly miserable Autumn statement ushers in a ‘back to the future’ moment. More austerity as the economy heads into recession, inflation north of 10% and plenty of cuts. Rightly, the Government cannot give in to excessive public sector pay claims but there will be months of public sector strife with strikes and periods of working to rule. Despite generous uplifts in the minimum wage, pensions and benefits, there will be little to gain politically as voters feel quality of life experiences deteriorating. Living standards are expected to fall by a record 7%.
Admittedly, many of the forces creating economic mayhem are global, notably the legacy of Covid and the impact of the Ukraine war, but that is not sufficient cover.
Starkly, the US economy is 4.2% larger than pre-Covid, the EU zone 2.1% larger, the UK 0.7% smaller. A devastating article in the FT today highlights that the NHS spends a fifth less per capita than similar European countries. Then there is Brexit which has hit trade hard. This week, former Environment Secretary, George Eustace, describes a post-Brexit trade treaty with Australia, for example, as ‘not a very good deal’ despite praising it at the time. According to the Office of Budget Responsibility, trade as a share of GDP has fallen 12 per cent since 2019, two and a half times more than in any other G7 country and it expects the longer-term impact of Brexit to affect trade intensity by some 15%. Only a third of voters now believe Brexit was a good idea.
Finally, an interest rate premium from the fallout of Trussonomics with rising interest rates wiping out many of the gains from subsidising energy bills for those on flexible rate mortgages.
There does not seem much to show from a Tory government in power since 2010 with five different Prime Ministers. A good one at the end is unlikely to erase voters’ memories.
And then to Labour. So much to attack but what is different now is that despite the blandness of Keir Starmer, they have an impressive front bench. First amongst equals is Rachel Reeves, Shadow Chancellor, and she laid into the Government with forensic detail today whether it be weaknesses in energy policy, stealth taxes or the failure of windfall taxes on energy companies due to offset allowances. At the say time, Labour are carefully laying the ground to ensnare Sunak in all the policy choices (mistakes) of the last few years.
It is said Oppositions rarely win General Elections; it is Governments that lose them. It is hard to disagree.
Inside Right Politics 