Soon after Rishi Sunak became Prime Minister, I had a long chat with the Chancellor, Jeremy Hunt.
After he had set out their plans to restore the international reputation of British economic management, following the debacle of Liz Truss and Kwasi Kwarteng, I suggested to Hunt a slogan for the next general election campaign: ‘Vote Conservative. We sorted out the mess left by… the Conservatives.’
I was being facetious. But in a way, that is what they are now saying.
Last week, after the Bank of England announced that the annual inflation rate had dropped to 3.4 per cent (a pleasant surprise to many), Conservative Central Office released a chart which was duly circulated by its MPs on Twitter/X.
It starts at October 2022, exactly when Sunak took over from Truss, and ends with February 2024. On the left-hand side, it says: ‘11.1 per cent: inflation was here’ — and a big upwards arrow pointing to that dismal figure.
The truth is that Rishi Sunak is not the problem for the Conservative Party. The loss of trust attaches to the party itself: no new leader will change that, writes Dominic Lawson
On the right-hand side, it has an arrow pointing downwards to 3.4 per cent, with the cheerful caption: ‘Now it’s here.’
On top, it says: ‘The plan is working.’
Leave aside that it is the Bank of England which controls monetary policy and, therefore, should take most of the blame or credit for how inflation has been tackled (though Sunak’s refusal to indulge in expansive fiscal policies or high public-sector pay increases was wise).
The problem for the Conservatives is that voters won’t thank the party that was already in charge when the unmentionable hit the fan.
Competent economic management is taken for granted by voters: most regard that as the minimum they expect from a Conservative Government.
So it resonates when Labour shadow ministers intone, with monotonous regularity, that ‘the Tories crashed the economy’ — and that sentiment is the single biggest reason for the Conservatives’ atrocious standing in the opinion polls.
Sunak was, in terms of policy, in opposition to the Truss government, and presciently so
If the supposedly competent ‘party of business’ demonstrates itself the opposite, then what is the point of them?
Yet Sunak was, in terms of policy, in opposition to the Truss government, and presciently so.
Not only that: as Chancellor, he was the only politician who warned about the risks of inflation, at a time when the Bank of England had fallen asleep at the counter-inflationary wheel.
In his Budget speech of March 2021, Sunak alerted MPs, unfashionably at the time: ‘While our borrowing costs are affordable right now, interest rates and inflation may not stay low for ever, and just a 1 per cent increase in both would cost us over £25 billion [a year].’
Later, he resigned as Boris Johnson‘s Chancellor of the Exchequer, complaining that the difference between the PM’s views on economic management and his own could no longer be accommodated. (‘Our people know that if something is too good to be true, it’s not true . . . it has become clear to me that our approaches are fundamentally too different.’)
After this led to the ousting of Johnson from No 10, and a leadership contest, Truss very successfully wooed Conservative members with a ‘too good to be true’ programme of unfunded tax cuts, combined with vast but unquantifiable fuel bills subsidies.
The internecine contest got nasty, with the Sunak team putting out a document declaring Truss’s policies ‘would mean increasing borrowing to historic and dangerous levels, putting the public finances in serious jeopardy and plunging the economy into an inflation spiral’.
And so it transpired, after party members decided they preferred the ‘too good to be true’ agenda to Rishi Sunak’s bleak realism.
If Penny Mordaunt became PM an immediate election would amount more to an execution than a contest — with the electorate, rather than Ms Mordaunt, wielding the sword
Amid the subsequent chaos of the Bank of England being forced to buy up government debt on a vast scale, as the pound plunged to near-parity with the dollar and mortgage rates spiked upwards, Labour’s lead in the polls reached an astonishing 33 points.
YouGov, in September 2022, recorded the Opposition at 54 per cent to the incumbents’ 21 per cent. I met Sir Keir Starmer during the week of that poll, and he seemed almost unable to believe it: but it was real.
The popularity gap is no longer that wide, but the Conservatives’ still shockingly bad polling figures are an augury of a shattering loss of councillors in the local elections now being contested.
This outcome will lead to another spasm in the parliamentary party, and there will again be calls (from anonymous MPs) for Penny Mordaunt to be ‘crowned’ Conservative leader unopposed, as a replacement for Sunak.
This is partly based on recent polls which suggest that while every other possible Conservative name would be less welcome as PM than Sunak, Mordaunt is marginally less unpopular.
Those advocating such a contrivance need to understand that even if they were able to organise yet another putsch, it would definitively establish that the Conservative Party is an ungovernable rabble and therefore should immediately be forced to a general election.
This would amount more to an execution than a contest — with the electorate, rather than Ms Mordaunt, wielding the sword.
And when it comes to economic grip and management (the issue on which most elections are won and lost) would Mordaunt, however adept as a public speaker, be an improvement on Sunak? Only in an Alice Through The Looking Glass world.
I, for one, can’t forget the excruciating interview she gave to a sympathetic Daily Telegraph during the leadership contest to replace Boris Johnson.
She had promised two big tax cuts — halving VAT on fuel and raising the great majority of personal tax thresholds by the rate of inflation.
So, obviously, the interviewer asked her: ‘How much will this cost?’ She didn’t have a clue, and after floundering for a bit, asked an aide to ‘provide [the figure] later’.
Mordaunt had also promised to ‘pioneer sound money, with a key fiscal rule to ensure that debt as a percentage of GDP falls over time’.
Naturally, the interviewer asked her what the national debt was, as a percentage of GDP, and what sort of level she wanted it to fall to.
Her best attempt at an answer was: ‘I have not got it in front of me.’
Can you imagine how such a lack of application to the most basic elements of economic governance would work out either at the helm of state or under the more stringent questioning of a general election campaign?
The truth is that Sunak is not the problem for the Conservative Party. The loss of trust attaches to the party itself: no new leader will change that.
This also means that even when Sunak and Hunt do what the public appear to want, it wins them little credit in the bank of public opinion. That was clear from the paradoxical reaction to Hunt’s Budget earlier this month.
Lord Ashcroft Polls asked the public for their views on all the main changes in the Budget, such as the cut in National Insurance and the new tax on vape products.
On every element, the public was highly positive. But when asked about their view of the package as a whole, a measly one in ten thought that it would leave the country better off.
In other words, clearing up their own mess is not the ideal Conservative success story.