At the start of the pandemic, I noted the surging popularity of Rishi Sunak to a former economic adviser to David Cameron. They sagely replied that it was easy to be a popular chancellor when you are giving away money but far harder when you are clawing it back, as the Prime Minister is discovering.
Next week the Chancellor, Jeremy Hunt, announces a raft of painful measures targeted at sustaining calm in the markets by showing how they will plug the £50 billion hole in our finances and tackle inflation. It’s a delicate path to tread as Sunak needs to simultaneously avoid deepening the recession. Going too far with spending cuts and tax rises will choke consumer confidence.
Somehow, Hunt must also find the funds to support our already weakened public services and protect the vulnerable. Plus — and this is an even tougher challenge — convince the electorate and business community there are sunlit uplands ahead, and the Tories are the party to take them there. It’s a tall order. Many would say insurmountable.
Last year, I saw Sunak at the Tory conference and he said that inflation was what was keeping him awake at night. He was right to lose sleep over it. If we don’t curb inflation, this will continue to be the biggest hit to our pockets and, for some in society, be catastrophic. Donating to your local food bank will be one of the most generous acts you can do this winter.
If there is one glimmer of hope for Sunak and us, it is that economists are predicting inflation will come down later next year. The more optimistic are arguing that a recovery could start by the end of 2023.
But the Government cannot count on this unfolding, and they must take seriously prioritising growth alongside fiscal responsibility. And that needs to start next week. I don’t agree with raising corporation tax and removing the last £2,000 tax-free dividend, but this is likely. The risks entrepreneurs take should never be underestimated. Many exhausted, laden with debt and depressed will give up. For those in retail and hospitality, huge employers in this city, lowering VAT on food and drink to keep punters spending their cash could be a lifesaver. Retaining discounted business rates until our economy recovers will stop retail outlets going under.
Secondly, helpful policy measures to support business on a practical level need to come sharply into focus after November 17. Incentivising our 36,000 medium-sized firms to grow could be a good place to begin. Economically, this would boost long-term growth. And politically it’s traditional Tory territory.
Pressuring high street banks to keep lending is vital, followed by improving access for medium-sized businesses to trained apprentices (the current system doesn’t work effectively) and rapid investment in re-skilling the workforce. Expanding the Shortage Occupation List so that hard-pressed sectors can fill vacancies from overseas and the EU when they can’t recruit locally is urgent for the next two years. Boosting big infrastructure projects, not cancelling them, would also be wise, such as the northern powerhouse rail.
Most importantly, we need a clear vision. Our services-driven economy fundamentally thrives on good times and consumer confidence. If the good times are not possible, then Sunak’s focus must be to keep spirits pumping. And this is where the competent technocrat austerity 2.0 approach will only go so far. He needs to tell us an immense story — big on emotional content and clever detail — to guide us through what is set to be a bloody awful year. What is the journey we are embarking on as a country? It can’t just be about competence and clearing up a Tory mess.
We need a strategy that ameliorates the fear we are in terminal decline and the worry that Brexit has hurt us economically. What is the mission of this Government — to help fashion our economy to win in an uncertain technological future? Never mind the traditional voter fears he will have to address — migrants in small boats, crime and the state of the NHS. The only succour the Tories can take is that Labour doesn’t have a convincing answer on these questions either.
So, once you’ve begun to put our finances in order Prime Minister, catch your breath and paint us some sunlit uplands — and do it with passion, intelligence, and conviction. We are sick, we are hurting and we need hope. It is a tall order, but it’s not insurmountable.
You can’t blame Matt Hancock for everything
By the time you read this, Matt Hancock will have survived his second bout of grappling with creatures most of us go to great lengths to keep a long distance from. This may be an unpopular view: I think he did better in the first episode than many expected.
As someone who knows Matt, he is prone to over self-confidence. But he succeeded in curbing his ego, and I suspect was far more nervous than he admitted, as well as being privately devastated that he has been suspended from his party.
Politicians have increasingly become the lightning rod for all our frustrations and fears, and this has only got worse since Brexit. Matt has put himself out front in I’m a Celebrity ... for abuse from every side.
I wouldn’t have advised him to take this on, but neither does he deserve the vitriol he’s getting and the blame for everything that went wrong in the pandemic. Judging from afar, with hindsight, is easy. Being a politician isn’t.
Perhaps his gamble was right. Frank questions from his fellow campers, eliciting (we hope) honest answers from Matt are what is needed.
Dom is just too hot to convince as Charles
Dominic West as Prince Charles in the new series of The Crown? Sorry, this is not working for me. He is one of our great actors, and I am a huge fan, but he is far too handsome, alpha and swashbuckling for this role; the jaw is too manly, the confidence too sexy to play our King in his younger days. None of it rings true. Biodynamic farming for this Prince Charles would involve copulating with a beautiful woman under the moon in a grassy meadow, not saving the planet, but further populating it. Dom, this was not for you
