Economy will be dominating issue in the political fights ahead

WE can’t quite dismiss partygate yet for the role it might play in the next general election. Yesterday’s local elections, the results of which are not, at time of writing, known, will have something to say about that.

Question marks over sleaze in Parliament, the appeal – or not – of Sir Keir Starmer as a PM-in-waiting and other side issues on the political scene can also not yet be dismissed for the impact they might have on the bigger picture.

But it is pretty clear, from the news yesterday that interest rates are on the up and Britain’s financial strength is waning, that one issue will dominate when voters next go to the polls to elect a parliament. Put bluntly: “It’s the economy, stupid.”

This mildly insulting phrase was coined by US political consultant and strategist James Carville, credited with overseeing Bill Clinton’s highly successful 1992 presidential election campaign.

It was reputedly pinned to the wall of Clinton’s campaign office to remind his staff of the most important issue for voters and therefore, the most important issue on which to fight the election.

Today in the UK, with the cost of living going through the roof, energy costs soaring and now mortgages and borrowing charges on the rise after years of ultra-low rates, the economy will again be a big player in how voters view this government and consider how the opposition might measure up.

For many years, while there have always been those for whom financial worries loom large, historically low inflation and low interest rates have made the majority less directly concerned about the economy.

That’s all changed in the past few months thanks to a unique set of circumstances which saw Britain leave the EU, coronavirus – and its aftermath – devastate the world and a war in Ukraine pile on the pressure.

Over the two years of Covid, Chancellor Rishi Sunak has made the right calls and cushioned citizens from the worst economic effects of enforced lockdowns. His record over the cost of living crisis is far less impressive.

With predictions from the Bank of England of 10% inflation and interest rates going in the wrong direction for the first time in decades, we need a Chancellor and a Prime Minister with a fundamentally different approach to the one we have seen so far.

Up to now, the support has been modest and the general attitude of Government that this is a global situation beyond our control.

That won’t be good enough to satisfy electors as the next election gets closer. Of course, the assessment that this is a global issue and that the levers ministers can pull are limited is, broadly, correct. But in times of crisis – especially leading up to an election – politicians are paid to be imaginative and come up with solutions that will make a difference.

We could be electing a new government in 2024... Inflation may have topped 10% – mortgage repayments will be eye-watering for many. What’s in the Government’s locker to address those issues? What’s the Labour alternative? We’ll need to know – soon.