Budget preview: will Thursday’s statement herald a fightback or the beginning of the end for the Conservatives?
By Michael Dowsett
It is often the case that the public’s short-term view of their new Prime Minister is formed on the basis of how they square up against their immediate processor; hence the tendency to observe an alternation between the ‘flash / charismatic’ and ‘dull / competent’ typologies. However, the 44-day record set by Liz Truss means that the new PM Rishi Sunak will be judged more on basic competency as opposed to overall charisma as he and the Chancellor prepare for Thursday’s Budget. This is based on the economic legacy of ‘Trussonomics’ and the intimidating headwinds provided by global inflationary pressures which represent a toxic brew that even the most adept of politicians would struggle to navigate unscathed.
The key question he needs to answer is whether there is a pathway through the current crisis. In strict accounting terms, the answer is yes. Indeed, as has already been extensively pre-briefed, Numbers 10 and 11 Downing Street have been running the rule over a wide range of possible spending cuts and tax rises. Whilst the usual allowances must be made for pre-budget spin suggesting a cut to a much loved piece of spending only for the Chancellor to stand up on Budget day to declare it duly ‘saved’ to plentiful cheers from his backbenches, balancing the books is still set to require a set of painful policy choices.
Even after reversing the tax cuts announced by Kwasi Kwarteng in September, the Chancellor still has to find around £50 billion on Thursday if the currently becalmed but recently highly twitchy bond markets are to be placated. With benefits and pensions set to rise by inflation, and the Government spending a small fortune on energy price support over the winter, departmental budgets and those on higher incomes can expect to take on a lot of the heavy lifting.
It's no surprise then that some were briefing the press over the weekend that the Conservatives’ recent polling recovery up into the high 20s might represent a high water mark. Compared to 2010, ‘Austerity 2.0’ – as it’s now been dubbed – takes place against a significantly more politically treacherous backdrop for the governing party. Instead of low inflation, a public willing in large part to buy into blaming Labour for the cuts and the context of a decade of sustained growth in public spending, Sunak/Hunt face an electorate looking increasingly fed up after 12 years of Tory rule amidst falling living standards and having recently laboured through a global pandemic.
Are the Prime Minister and Chancellor destined then to go down in history as the doomed nightwatchmen who steadied the ship only for a restless public to gleefully eject them from office at the first opportunity? Quite possibly. Though lingering doubts about Labour and the relative personal popularity of Rishi Sunak suggest a small, though highly tentative, path to a fifth Tory terms still exists.
If Thursday’s Budget is in hindsight to be seen as the start of the comeback of the Conservatives ahead of a shock win at the polls in 2024, the PM and Chancellor must stray beyond their comfort zone of being the grown-ups in the room dutifully sorting out the mess left by others. After all, the voters may reasonably ask, remind us which party each of the last four PMs has belonged to?
Instead, it would be wise for Rishi Sunak to consider why Liz Truss pipped him to Number 10 over the summer. Truss’s argument that Britain should aspire beyond a future of low growth and benignly accepting entrenched interests holding back the economy was certainly a more compelling pitch than Sunak’s perceived dry managerialism, and one that it’s easy to see Keir Starmer successfully deploying on the hustings.
Surely then it’s only by beginning on Thursday to look beyond balancing the books and outline a vision of what the British economy will look like by 2030, and how this will leave most people better off than today, that the Conservatives’ can hope to ever properly get themselves back in the game. Otherwise, a historical write-up as Keir Starmer’s warm-up men surely awaits. I can almost hear Boris Johnson readying his pen now