The bottom line from that autumn statement? Prepare for a general election in the spring. Yes, the Tories lag far behind in the polls; and sure, Rishi Sunak’s personal ratings fall almost as short as his trouser legs. But boy, does the prime minister want you to know he’s up for a fight. That’s why his chancellor is giving away tens of billions of pounds in tax cuts. It also explains his haste in pushing those pounds into voters’ pockets. Rather than wait until April to make that 2p cut to national insurance, Jeremy Hunt will ensure it hits pay packets in January. Ever get the feeling you’re being bribed?
There is no magic money tree, Theresa May used to say. But that was three prime ministers ago, and anyway it was a lie – a government steeling itself for an election can always lay its hands on some cash. Best of all is taxpayers’ money, which Hunt gleefully handed out in sweeteners worth £21bn a year. Big corporations got their incentives to invest. About 28 million employees were handed an average of £330. White van man got a few quid, as did pub landlords. Unlike Liz Truss, who chucked money at a fug of thinktank ideas on growth, Sunak is precisely targeting groups of voters.
The giveaway came when his chancellor gave a shout to the Sun newspaper. That’s the constituency the Tories are aiming at this winter: an idealised “hard-working” voter who thinks they’ve been taken for a ride by some unholy axis of “coasters” on benefits and Guardian-reading tofu-chompers. This is where the culture war and class war meet.
But it’s not those imagined enemies the government should worry about. Nor in an election will it be Keir Starmer who poses the biggest threat to Sunak. No, the tables and graphs in the autumn statement suggest that what will drive the Tories out of Downing Street is sheer dreadful reality.
Just look at the small print of the documents issued by the Treasury and the Office for Budget Responsibility for some giant nasties. The biggest drop in living standards since records began in the 1950s. The typical household paying more than £4,000 a year extra to HMRC since Covid, with stealth taxes alone raising £45bn. House prices falling, while cash-strapped councils come away with barely anything.
Strip out the spin and mute the jokes, and the big picture is bleak. The average Briton is still getting squeezed on pay, rinsed on taxes, and hearing from their mum or dad that their knee replacement has been cancelled for the third time (amid all the handouts, Hunt had no extra money for those NHS waiting lists), while their children’s school sends them begging letters. And let’s not talk about this winter’s energy bills, the cancelled trains or the rivers of shit.
Still, let them eat headlines! It worked for David Cameron and for Boris Johnson – and tomorrow’s Sun and Mail will be delighted at having their tummies so ardently tickled by a Tory chancellor. The Telegraph will grump that its complaints about inheritance tax haven’t been heeded, but Sunak and Hunt will doubtless address those in their spring budget. Meanwhile, economists and analysts can see very clearly how the chancellor has pulled such huge rabbits from his hat. The answer is that it is a triumph of false accountancy over a strong economy.
Hunt may claim the UK has “turned a corner”, but that is not what the numbers show. The country is suffering a second lost decade of growth. Inflation is starting to fall, both in the UK and across many other countries. Sunak can as much claim the credit for that as I can for the autumn leaves falling from the trees.
High inflation has pushed up the taxes paid by workers and businesses, which the government is now using to make giveaways. Realists might point out that high inflation also eats into the budgets of Whitehall departments and town halls across the country, but then reality is no friend of this prime minister. Instead, he’s pencilled in spending cuts so vast they are unachievable and unbelievable. The result is a strange mishmash of 40 years of Toryism. Genuflection towards the late Nigel Lawson, and dispatch box jokes about Tell Sid. A wet, slobbering kiss, Boris Johnson-style, for “red wall” voters. An axe for public services as sharp as that waved by George Osborne. It makes no sense, and perhaps it’s not meant to. What it reflects is the weird, untenable coalition that 2020s Conservativism has become.
This is Rishi through the looking-glass. A plan for growth, where growth is abysmally low. A trumpeting of tax cuts, when taxes in this parliament are actually rising at their fastest since records began in 1948. A crackdown on the workless in the name of saving public money, which will cost more than it saves. A pantomime of rectitude from a government playing accounting games.
If Starmer and Rachel Reeves accept this settlement, they will be walking into a huge trap. The Labour leadership is not quick on its feet, as demonstrated by the mess it has ended up in over the bloodbath in Gaza, but here it must be nimble. This autumn statement is less about growth than picking sides.
The Tories are clear whose side they are on. Is Labour? Starmer and Reeves prefer homilies about the lack of money and the need for growth and public sector reform. They warm up slogans from the 1990s and think that dressing up as technocrats will win them public approval. Meanwhile across the aisle, the Tories think nothing of dropping £21bn in a single afternoon if it gives them a fighting chance at the next election.
The obvious lesson is that Labour has to pick a side and think of how to give it cash and power. And it’s not lacking people to fight for: the communities wiped out by the loss of industry and pulled down again by austerity; the public services run to the bone after 13 years of Tory cuts; the care workers used by the state as a cheap substitute for nurses.
For one afternoon, Sunak has succeeded in knocking Starmer off balance. But he is still heading for political extinction. The Tories can worry about their red wall and throw some money there. They can fret about their blue wall down south and cut inheritance tax in the spring. But what they should really worry about is the brick wall of reality – and their charabanc of posh boys and chancers and grasping ex-lobbyists is still heading straight towards it.
Aditya Chakrabortty is a Guardian columnist
