The chancellor’s praise for the economic policies of previous Conservative governments augurs badly for struggling families
Last modified on Mon 4 Oct 2021 15.00 EDT
One of the lessons that leading Brexiters learned from the 2016 referendum was that brazen opportunism can pay off handsomely. A Eurosceptic movement born in the more arcane reaches of the Conservative right, committed to deregulated, laissez-faire economics, achieved its goal by channelling a desire in Labour’s heartlands for more, not less, protection from the global economy.
This week, as the Conservative party conference meets in Manchester, the same audacity is on display again. As the army moves in to deliver urgent fuel supplies, food and labour shortages grow and an unprecedented, wasteful cull of more than 100,000 pigs looms. Boris Johnson and his ministers have hailed the chaos as necessary disruption on the way to a “high skills, high wage” economy. The worse things get, the better they will become, it is claimed, as business is forced to adapt to a long-term absence of migrant labour and up its game on pay and conditions. The abject handling of a foreseeable crisis, exacerbated by Brexit, is thus rationalised post-hoc as the royal road to “levelling up”.
The politics is clever, but the looming reality for millions of families jars horribly with the prime minister’s Panglossian rhetoric. In a speech on Monday that took less than half an hour to deliver, the chancellor, Rishi Sunak, paid ominous tribute to the austerity policies pursued by his predecessors. Emphasising a commitment to fiscal “responsibility” post-Covid and his low-tax aspirations, Mr Sunak saluted “10 years of sound Conservative management of our economy”. He then announced a few very modest interventions to assist the post-pandemic recovery, including a further £500m to help jobseekers. “Work not welfare” is the dividing line with Labour that the chancellor wishes to draw.
But this was small beer, given the cost of living challenges piling up this winter – some of them directly attributable to Mr Sunak’s decisions. The removal of the £20 universal credit uplift will save the government £6bn by significantly reducing the already limited income of 5.1 million adults, many of them in work. Rising fuel costs and food prices will erode incomes more widely. So too, of course, will the rise in national insurance payments in the spring, insisted upon by Mr Sunak to pay for social care reform. No wonder the chair of the Northern Research Group of Conservative MPs, Jake Berry, is growing restive. The government’s challenge, Mr Berry said on the eve of the conference, “is to square the circle of how you level up … poorer communities while at the same time taking cash out of their pockets”. Mr Sunak’s brief address did not even attempt to offer a solution, being crafted instead to appeal to the more orthodox Tory preoccupation of keeping a tight rein on public finances.
Since the election of 2019, Mr Johnson’s government has been grappling with the problem of how to consolidate its new red wall vote while keeping its traditional supporters onside. Not for the first time, Mr Sunak has signalled that he shares and stands for the fiscally conservative priorities of the latter group. Given the challenge of the coming economic squeeze on households, the need for tangible evidence of “levelling up”, and the urgent imperative of investing in a net zero economy, this approach may be viewed with mounting frustration by the prime minister in the months to come. Blithe boosterism will not save Mr Johnson’s government from a reckoning at some point.
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