What’s the point of conservatives if they can’t trust the economy?


Now we know why Rishi Sunak keeps talking about the fight against the national debt – it’s quickly becoming the only card left for him to play.

On Tuesday, as Boris Johnson tried to pull off another show of verbal, logical and moral gymnastics in response to even more partygate questions, an explosive poll was released showing that public perception of the government’s economic competence is in jeopardy. free fall.

Of the seven economic trackers managed by YouGov, the Conservatives are ahead only of Labor in the fight against the public deficit.

The opposition beats the Conservatives on five of the others: which government would create more jobs, improve living standards, help people move up the homeownership ladder, reduce the number of people living in poverty and, which is particularly important right now, would keep prices low .

Two years ago the Tories enjoyed a whopping 39 point lead over Labor when it came to handling the economy. It has now completely evaporated; the two parties are neck and neck.

This follows an Ipsos poll at the end of March which showed that two-thirds of Britons do not trust the Tories to cut the cost of living – which is almost certain to be the defining issue in this parliament.

Perhaps even more worrying for Tory MPs was a Savanta ComRes survey which found that 39% of voters saw the Conservatives as a high-tax party while just 27% would label Labor as such.

For most of the past half-century, the Conservatives have been called the “bad party.”

But most voters were willing to accept that this ‘nasty thing’ was primarily a manifestation of the fiscal discipline needed to keep the nation’s finances in order, allowing them to retain a greater proportion of their payroll and allow economic growth to support public service spending.

If the Conservatives were cruel, it was, in the end, to be nice.

It was not until John Major’s government lost its reputation for economic management following the UK’s chaotic and costly exit from the EU exchange rate mechanism on Black Wednesday in September 1992 that voters were ready to start considering a change of allegiance to Tony Blair’s New Labour.

Are we approaching a similar inflection point?

Are the barbs thrown by Shadow Chancellor Rachel Reeves about this being a high-tax, low-growth government ultimately more damaging than Keir Starmer’s attacks on the Prime Minister’s integrity ?

Voters may well walk into the next local election wondering: what good are the Tories if they can’t be trusted when it comes to the economy?

Certainly, other reasons for being conservatives seem increasingly strained.

Its claims to be the party of law and order have been undermined somewhat by the production of the first sitting prime minister to break his own laws.

Its pretensions to being the party of business have been somewhat undermined by this same Prime Minister’s exhortation to the nation’s wealth creators to procreate with themselves.

And its claims to be the party of conservatism and small ‘c’ tradition have been somewhat undermined by its decision to prorogue Parliament, rhetorically attack High Court judges and throw a party in Downing Street on the eve of the Duke of Edinburgh’s funeral.

Of course, in the last election, the Conservatives’ main promise was to deliver Brexit. But now it has been. And, contrary to the whispers of the plot, it is very unlikely to be undone.

And so more or less or all that’s left for Sunak is his promise to meet his self-imposed fiscal targets and get the national debt under control.

The question is whether this monomania can begin to add to the nation’s woes. Few of the most extreme modern monetary theorists would argue that the government doesn’t need to foot the bill for all the Covid spending of the past two years at some point. The debate is whether he should do it now.

Indeed, reading between the lines of the Spring statement, it seems likely that the Chancellor has this row with himself on some level. Sunak is raising National Insurance contributions by 1.25 percentage points now to lower the basic income tax rate in two years.

Why raise a tax to the top of the hill and bring another down the other side?

Part of the answer has to be that while he may have started to question the advisability of raising taxes amid a cost of living crisis, he didn’t want to lose face by going back on a policy he announced only a few months ago.

And yet he was prepared to cut taxes just before the next general election in hopes of being named the next leader of the Conservative Party.

It sounds like playing games with people’s finances for political gain and at a time when many are worried about being able to heat their homes and feed their families.

They need help now, not in 2024. Sunak’s fiscal hawkism offers neither jam today nor jam tomorrow, but a spot of Marmite a few years from now.

Another survey released this week showed that the National Insurance hike is likely to lead to a significant number of businesses cutting spending and job creation.

Around one in five companies said the increase in contributions, which must be paid by both employers and employees, will reduce their ability to invest, while one in six said it would discourage the creation of new ones. positions, according to the Recruitment and Employment Confederation. .

That’s why Sunak’s policy is facing such criticism: because it will cut investment just when the economy needs all the help it can get.

The Chancellor pulled the handbrake when he should slide his seat forward to make sure he can reach the accelerator.


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