The Tory party has ripped up its trump card
In 14 disastrous years the Conservatives have shredded their reputation for economic competence
Even as Jeremy Hunt was delivering it, last week’s “nonbuzz” Budget seemed to add up to a fat lot of meh. But perhaps that instant assessment was overly generous. Viewed with a little perspective, it could be best likened to the last fiscal twitch of a political party already laid out on the slab and fast approaching room temperature.
The Chancellor pencilled in future cuts to public spending (which almost certainly won’t happen) in order to shave a couple of pence off personal taxes (even as the overall tax burden continues to rise) in the face of pretty dire economic forecasts from the Office for Budget Responsibility (which may or may not prove to be accurate).
In failing to articulate any clear differentiation with Labour on fiscal matters, much less a guiding political philosophy, Hunt was adopting a defensive position to limit losses rather than put up a fight. And, in some ways, who can blame him? The polls are consistently disastrous, recent by-elections have confirmed the worst, more sitting MPS are announcing that they will be standing down (or defecting) by the day and the fat lady has started gargling with Listerine.
There may well be time for one last set-piece fiscal event before the general election. But, given Hunt’s last three haven’t improved the Tories’ epic unpopularity, it requires a significant triumph of hope over experience to imagine that might do the trick.
In the past decade and a half, the Conservative Party has systematically shredded its reputation for economic competence and presided over an unprecedented peacetime expansion of the state. So when they now quote Margaret Thatcher, make vague promises to abolish National
Insurance, or, in the latest sop to the credulous, claim they’re desperate to cut benefits “in the longer term”, no one believes them.
On the positive side of the ledger, the Tories can point to very low levels of unemployment. Confoundingly, they appear reluctant to blow their own trumpet on education reform, one of their few genuine successes.
But by almost every other metric, the successive Tory-led and Conservative governments that have been in power since 2010 have failed in the primary task of any administration: to leave their country in a better condition than that which they found it.
The US has a higher budget deficit than the UK; Japan is far more indebted; Germany, France and Italy all have worse growth outlooks. But it is the UK, almost uniquely among the world’s richer countries, that has achieved the economic gloom trifecta.
True, the world was still suffering from the aftermath of the financial crisis when David Cameron ousted Gordon Brown’s Labour government in 2010 and formed a coalition with Nick Clegg’s Liberal Democrats. Arguably the UK has still not fully recovered. There’s since been Brexit, the Covid pandemic, a sharp spike in inflation, and an energy crisis prompted by Russia’s invasion of Ukraine to contend with. But five Tory prime ministers (each arguably worse than the last apart from a slight uptick at the end) have played a series of bad hands very poorly.
Any government coming to office in 2010 would have had to come up with a credible plan to fill the hole in the public finances created by the collapse in tax revenue. However, George Osborne’s decision to let austerity do all the heavy lifting ended up doing more harm than good.
On the flip side, Boris Johnson and Rishi Sunak needed to fight harder to ensure that the huge bill for keeping businesses and households afloat during the pandemic didn’t shift the political centre of gravity, resulting in high spending becoming the new norm at the same time that interest rates on government debt are starting to climb.
It’s often said that the Conservative Party’s greatest strength is the ability to reinvent itself. But change guises too frequently and the electorate ends up forgetting what you stand for.
Despite boosting government spending to its highest sustained level since just before Thatcher took office, a succession of culture war skirmishes and the Potemkin Rwanda plan mean, according to recent polling, the electorate considers the current Government to be nearly as Right-wing as Ukip was in the lead-up to Brexit.
Labour will be desperately trying to guard against complacency but it is a sign of their confidence that Rachel Reeves is very much in expectation management mode.
Appearing on the BBC over the weekend, the shadow chancellor said an incoming Labour government would have to carry out a spending review and was unable to rule out possible cuts in public services.
“It is clear that the inheritance a
Labour government would have, if we do win the election, will be the worst since the Second World War,” she said. “I have to be honest that we’re not going to be able to turn things around straight away.”
She’s not wrong. The UK is now wedged so firmly between high taxes and high indebtedness that any dramatic moves designed to stimulate economic growth, as attempted by Liz Truss and Kwasi Kwarteng, risk worsening the country’s financial predicament.
Infrastructure is crumbling, councils are falling like tenpins and public services are on the point of collapse. Public investment is lower than in similar countries and the stock market is treading water. Productivity has flatlined for 16 years, average real wages for 15 years and business investment for eight years.
If there’s one consolation for the Tories, it’s that they look certain to be handing their likely successors an almost impossible task.
If there’s one consolation for Labour, it’s that they will struggle to do any worse than their predecessors.
‘Change guises too frequently and voters end up forgetting what you stand for’