It was an autumn statement that fired the starting gun on election-friendly tax policies, fuelling speculation that Rishi Sunak was leaving his options open for going to the polls in late spring next year.
Out went the politically divisive idea of a cut to inheritance tax for the wealthiest, and in came a speech with broader electoral appeal: a cut to national insurance and a large increase to state pensions.
Most Westminster watchers still think Sunak will wait until next autumn for an election, hanging on in No 10 as long as possible given the state of the polls.
But he had previously suggested that Tory MPs desperate for some voter-wooing policies would have to wait until next year for tax cuts. And at Conservative conference in the autumn, the prime minister was still focused on pleasing his own party, with policies such as the cancellation of HS2.
So the decision to opt for an almost immediate, headline-grabbing cut sooner than expected suggests No 10 and Conservative party headquarters are laying the groundwork for a possible earlier contest.
The tone of the offering also has a much more centrist Tory appeal than Sunak has displayed in the past year, consistent with his decision to bring David Cameron back into government. It will do nothing to dispel suspicions that the former prime minister is influencing No 10 on more than foreign policy.
Labour and the Liberal Democrats now have something to work with: the fact that the national insurance cut will be dampened by the effect of fiscal drag, costing people a total of £200bn in tax by 2029.
Labour will doubtless point out that Hunt is giving with one hand and taking away with the other. As Paul Johnson of the IFS said: “These tax cuts won’t be enough to prevent this from being the biggest tax-raising parliament in modern times.”
On top of that, there are the troubling economic and fiscal realities that Hunt glossed over, and which will prove problematic for which ever party wins the election – most likely Labour.
Growth has been downgraded, living standards are falling faster than any time since the 1950s, inflation is forecast to be sticky, and public spending cuts are factored in of about £19bn.
Hunt is pushing the limits of his fiscal rules by spending almost all of his headroom – and in doing so, he is setting a trap for his opponents.
Labour will not be able to oppose cuts to headline rates of personal taxes, but the next government will most likely be in the tricky post-election territory of having to raise taxes or squeeze the public sector.
At the point of an election, the Tories may also choose to make a series of pledges about not raising taxes that Labour could find it difficult to match within its current fiscal rules without implying spending cuts.
Rachel Reeves, the shadow chancellor, focused her response on the overall picture – a Conservative government that has left people feeling worse off after 13 years. She has not opposed the tax cuts, but chose to highlight the overall high taxation brought in by the Conservatives.
The Tories will also go into the next election in a very weak position on public services, with little in the autumn statement towards helping the NHS, education, or local authorities struggling with the cost pressures of inflation.
“Nothing that has been announced today will remotely compensate,” Reeves said in the chamber. “Mortgages rising. Taxes eating into wages. Inflation high, with prices still going up in the shops. Public services on their knees.”
The Tories appear to have reached for the playbook of short-term tax cuts to bribe the electorate, and political tricks over fiscal pledges. But Labour has the powerful overarching narrative about the last 13 years, which is going to be difficult for Sunak and Hunt to counter.
