TThe Tories should be roasted. The words spoken by Jeremy Hunt before the House of Commons on Thursday, together with forecasts from the Office for Budgetary Responsibility, should be enough to ensure we are in the final phase of 14 years of Conservative rule. Given that politics affects the economy and that the dominant question of any campaign is some version of the one Ronald Reagan asked Americans in 1980 – “Are you better off than you were four?” [or 14] Years ago?” – The Conservatives are likely to be headed for a crushing defeat in 2024.
The economic outlook could hardly be bleaker, with all indicators pointing to gloom. Real household incomes will fall by a catastrophic 7% over the next two years, sending living standards back to 2013 levels: nine years spent pushing the boulder up the hill only to come rolling down again in 24 months. Forget the crash of 2008, the earnings decline projected for next year alone will be the steepest since records began in the mid-1950s. Meanwhile, Britons will pay more in taxes as a percentage of national income than at any time since the end of World War II.
The coming recession may not be as deep as 2008, but it will be broader and affect everyone. Experts are warning of a food-bank winter of cold, hunger and stress already plaguing the – staggering figure – 14.5 million Britons in poverty, spreading to those we once called the bruised middle. A further 500,000 Britons will be out of work over the next two years as any increase in wages for workers is eaten up and overtaken by inflation. An estimate says Real wages will not rise to 2008 levels until 2027: This suggests that Britain will not have suffered just one lost decade, but two. The front page of the Daily Record in a nutshell: “You’ve never had it so bad”.
All this economic pain for the country should mean political agony for the government in charge. Not least because, despite the Chancellor’s valiant attempts to pretend that Britain’s problems are ‘made in Russia’, voters know the hole we find ourselves in grew much deeper eight weeks ago. That’s when Liz Truss and Kwasi Kwarteng presented a budget that spooked markets to the point where Britain was no longer trusted to make its own fiscal decisions. Instead, it’s on probation, with Hunt obliged to pay high taxes and spend low to appease the money men whose loans the country needs to survive.
Furthermore, the remedy reality imposed on the government is tearing apart the coalition that got it there. So-called Red Wall voters who gave Boris Johnson a majority in 2019 did so partly because they were promised big bucks to catch up with the South, not a softer version of George Osborne’s austerity measures. Meanwhile, blue wall Conservatives, and particularly the MPs they represent, are conservative because they believe, often for theological reasons, in low taxes – yet it is their government that collects more taxes than Stafford Cripps, Denis Healey or Gordon Brown ever dared. Most Tory MPs are willing to take Hunt’s medicine for now, but only because they craved calm after Truss’ turmoil. Her patience will not last long, which means that Rishi Sunak will soon be dealing with a troubled parliamentary faction that has long since lost its knack for discipline.
Putting all of this together gives you the expectation that most Tories themselves privately admit: that this is the end of days. The best they can do is hope that something comes along — that inflation falls, interest rates fall, growth returns — that voters give them one last chance. But few rely on it. On the contrary, most are Preparing for a Labor government.
And yet, bleak as the Tories’ prospects may be, Labor’s road to victory is not as straightforward as it might first appear. And that’s because Labor faces a different opponent than they did a few weeks ago.
Labor is clearly ahead in the polls. But that lead grew in response to the previous two iterations of that government. First, voters were disgusted by the scandal, dishonesty and hypocrisy of the Johnson administration, and by Johnson himself in particular: his failure to follow his own Covid rules broke the bond of trust voters held in him in 2019. Next, voters balked at Truss’ flowery incompetence, which shook the Tory’s reputation for economic acumen so thoroughly and so quickly that, as I discovered for myself earlier this month, even US politicians and pundits “Liz Truss” are now casually calling it use as a synonym for debacle.
The Hunt-Sunak combination is another suggestion. Sunak may yet regret his promise to restore “integrity, professionalism and accountability” to the government – thereby setting a standard by which every failure and poor appointment of a minister can be judged and condemned – but for now few voters would endorse him the same morale offset class as Johnson. Similarly, he, and Hunt in particular, are effective at portraying themselves as enduring technocrats rather than the mad-eyed ideologues that everyone has replaced.
Truss and Kwarteng were such an easy target. With their tax cuts for the richest, they were pantomime villains who invited audiences to boos and hisses. The new duo is smarter than that. Not only have they not abolished the top rate of income tax, they have brought in more high earners. They will raise benefits and pensions in line with inflation, raise the minimum wage, give more money to schools and hospitals, and extend the energy price guarantee for those who need it most. Of course, there are sleights of hand: non-doms are safe; the energy giants should have expected a higher windfall tax; Local governments will be forced to take the ax on services that Osborne’s austerity measures already shrunk a decade ago. But Sunak and Hunt have made sure the look is different – two decent men doing their best to clean up a mess and keen to keep an eye out for people and services in need. Rounding out the picture was the announcement that a couple of New Labor-era bigwigs would be on hand to provide advice and support.
That makes it harder for Keir Starmer. He likes to be the adult in the room, but in 2024 he won’t claim that role alone. He is asked whether Labor will stick to the spending cuts Hunt has cunningly planned for the other side of the next election. If Starmer and Shadow Chancellor Rachel Reeves don’t stick to Tory spending plans, as Tony Blair and Gordon Brown promised in 1997, what other cuts will they make? How will they add up their totals given their billion-dollar green investment plans? Labor is always held more accountable than the Tories – unfair but true. At the moment, Labor says there is no way of knowing what state finances will be in by 2024. This position may last for a while, but not forever.
All of this is complicated by Labour’s refusal to talk about the great, unpronounceable, giant, stomping elephant that marked Brexit, which the Bank of England Governor confirmed this week, is a big reason why the UK economy is contracting while the Eurozone and US are growing. Public support for leaving the EU is at an all-time low, and even one in five voters now admit it was a mistake. It is the single biggest blunder of the post-2010 period, if not the post-war period, and yet the opposition can hardly speak out on it, let alone demand a response from the government.
So yes, the darkness descending on Britain is so thick now that the simple logic of ‘time for a change’ should result in the Conservatives being beaten in 2024. This week, the economics got simpler and clearer – but the politics just got trickier.