Jory MPs publicly despise Matt Hancock, but they may soon be envious in private. There is a worse fate for a politician than to be stuffed with kangaroo testicles and ostrich anus in exchange for a very large check. As the disgraced former health secretary is seen consuming exotic genitals, Tory MPs brace themselves for the ritual humiliation of facing aggrieved voters demanding to know why the government is making their lives even harder .
The headline national event of late autumn is the chancellor’s fiscally brutal package of tax hikes and spending cuts expected in 11 days. It will be a bush trial of the entire Tory party before a jury who are already telling pollsters they are eager to evict the Tories.
Jeremy Hunt was recently caught quoting a line from Barack Obama during the 2008 financial crisis: “It would be really interesting shit if I wasn’t in the middle of it. This is shit that will only get carried away. The Bank of England has accompanied its latest interest rate hike, the biggest hike since Black Wednesday three decades ago, with the warning that, on the journey through this crisis, Britain is likely to experience an inflation spike of around 11%, the longest recession in a century and a doubling of the unemployment rate. Bank Governor Andrew Bailey warned of a “difficult road to travel”.
Many voters already think they are on a highway to hell paved with falling real incomes that are nowhere near keeping up with escalating mortgage and rent payments as well as soaring prices for food, energy and other essentials of life. Some may have thought things couldn’t get any worse, but Rishi Sunak and his Chancellor will soon rid them of that illusion.
Their planned crisis may not be as excruciating as the government says in advance. “They fly a lot of kites to see which ones catch the fire the most,” said a senior Tory official. Fueling media speculation about the brutality of the pressure, the government is playing the expectation game in hopes of generating some relief when the Chancellor’s measures turn out to be slightly less gruesome than pre-stated. I’m not sure this trick will work. Being told you’re about to be thrown out of a 10-story window won’t make you feel any better when you’re then thrown out of an eight-story window.
Neither tax hikes nor spending cuts will be popular, but when asked to choose, most citizens say they would prefer the former to the latter. The average Conservative MP leans in the opposite direction. Liz Truss’ fantasy that growth could be revived through unfunded tax cuts exploded on contact with market reality and parachuted Mr Sunak into number 10. A fiscal conservative now heads the government and Tory MPs generally accept that more tax hikes are inevitable. That doesn’t mean they’ll be enthusiastic about it. More than anything else, it was his tax collection record that kept Mr Sunak from winning the Tory leadership when he made his first tilt at work. Unity and discipline have only been superficially restored in the Conservative Party. At best, Tory MPs will be sullen about voting to raise taxes even further. The Prime Minister and the Chancellor will be very lucky if they do not trigger one or more backbench revolts.
Finding and implementing public spending cuts will be even more of a nightmare. It has been said that the Treasury will try to keep public sector wage increases to just 2% in the next financial year, which would mean a big chunk of the real value of salaries for police officers, teachers and health workers. “They won’t get away with it. They just won’t,” says a former Conservative cabinet minister. Public sector unions have already started voting their members for strikes over the winter. Staff shortages are increasingly felt. The most recent official statistics report that the NHS in England is short by more than 46,000 nurses, meaning less than 90% of vacancies are filled. The effects of the strikes on the health service, where more than 7 million people are already on English waiting lists, would be quite atrocious. In a battle between conservative politicians and nurses, the winner will not be conservative politicians.
The Resolution Foundation estimates the government could find £10billion through cuts to infrastructure projects and other capital investment that would be relatively easy to announce but bad for growth. Attacking the real value of working-age benefits and pensions could fetch a similar sum, but would be toxic in the midst of a cost-of-living crisis.
Faced with the macabre state of public finances, ministers have two excuses. One is the vast expenses related to the pandemic. The problem with this alibi is that it is also Mr. Sunak’s main claim to fame. Said a senior Tory: ‘It’s hard for him to say I did this wonderful thing with the furlough scheme and all that – now you’re going to have to pay for it for years to come.’ The ministers’ other culprit is the Kremlin. There is no doubt that Putin’s war and the legacy of the pandemic are having a global impact, but no other advanced economy has done worse than Britain. We are the only G7 country to be poorer today than before the pandemic. The predicted post-Covid boom never materialized and now we must prepare for another downturn. The grim prediction from the Bank of England is that Britons will be even worse off in 2025 than they were before Covid and people didn’t feel very prosperous then.
The Opinium poll we are releasing today suggests that Labor and the Conservatives are pretty much neck and neck when voters are asked which of them is more competent to manage the economy. It’s a beacon of encouragement for the Conservatives given what they’ve put people through this year, but it doesn’t tell us how the public will feel once they endure a tough winter in which disposable income will be crushed even harder.
The Conservatives will try to distract from their record by diverting questions to the opposition. Labor will be against spending cuts. The Tories will therefore ask what taxes Sir Keir Starmer’s party would raise instead. If the opposition denounces the tax hikes, ministers will demand to know what spending Labor would cut instead. Sir Keir’s party does not yet have a detailed tax and spending plan. He and Shadow Chancellor Rachel Reeves can argue it’s unreasonable to expect them to produce one when the Tories have gone from Trussonomics madness to Austerity 2.0 misery in the space of less than two months. The Shadow Cabinet agrees that it’s imperative that they don’t get sucked into a “so what would you do?” trap, which will impale them on the hook while letting the preservatives detach from it. “It’s not our black hole,” says a senior Labor Party official. “It’s the Tories’ black hole and they have to be made to own it.”
When Mr Sunak first moved into Number 10, Sir Keir campaigned for an immediate election and received great public support for the request, but not everyone around him really wants an early visit at polling stations. You’re unlikely to hear a Labor person say this into a live microphone, but some of them are muttering furtively that their party’s long-term interests might be better served if the election comes later than sooner. A Labor government taking power in the near future would be handed wrecked government finances and ailing public services while instantly being faced with horrific dilemmas of how to fix things.
It wouldn’t be like 1997, when Tony Blair inherited a growing economy from the outgoing Conservative government. This provided him and Gordon Brown with the money needed to lower taxes while increasing spending on the services most important to the public. A Labor government taking power anytime soon would face a situation more akin to that of 1964 and 1974, when Tory regimes bequeathed an ungodly mess to Labor successors who were then themselves swallowed up by economic crises. So it is better, some Labor thinks, to hold an election later and let the Tories endure the hellish landscape they have created. It’s more telling testimony to the depths of the shit that Mr. Hunt and Mr. Sunak are in – and the country with them.