Rishi Sunak has always been different from the rest of us. A little sweeter, much richer. As Britain has faced spiraling inflation, the Chancellor has grappled with deflation – in his approval ratings. Forget the cost of living, the incredible shrinking Chancellor is struggling with the cost of living next to Boris Johnson.
So Wednesday’s spring statement was a chance for Sunak to step back — two years precisely, to the start of the pandemic when his understanding of basic details made him a standout figure in Johnson’s cabinet. As we try to keep our extremities warm, could the Chancellor keep his political prospects warm?
For most middle-aged men, a spring statement means wearing flip flops on the school run. For Sunak, that meant a 28-minute speech without the theatrics of a real budget. No jokes, some political maneuvering, a firm but unspectacular delivery. “Borrow DOWN, debt DOWN,” he said early on.
Sunak is a low-tax chancellor, the same way people who play air guitar in their bedrooms are rock stars. He did his best. It has cut fuel taxes by 5p a litre, meaning when your house is flooded by climate change it will be cheaper to drive away.
He boasted that the government was making “tough decisions”, by which he presumably meant a tough decision to increase National Insurance and a tough decision to cancel much of it. After celebrating the tax increase to help fund the NHS last year, this year it has exempted low-income people from paying it.
Sunak’s surprise was a plan to reduce the basic rate of income tax, but not before 2024. Lord, make me chaste, but not yet. Strengthening the economy “is not the work of a single statement. But it starts today,’ he said, seemingly forgetting that the Tories have been in power for as long as Chelsea’s last 10 managers.
The performance lacked the swagger of previous Sunak outings. Gone is the contagious bomb of Eat Out To Help Out. Any further action on heating bills should wait until the fall. Nonetheless, Tory MPs were quite happy. On one side of Sunak, Johnson nodded like Churchill (the insurance dog). On the other, Priti Patel looked grim, as she often does in the presence of large numbers.
“WE HAVE A PLAN,” bellowed the chancellor. A plan to increase defense spending? A plan to cushion the impact of inflation on public services or on recipients? Uh no. A plan, it seems, to hold an election in mid-2024. And people on Universal Credit don’t tend to vote Conservative, unlike people who drive cars.
Overall, Sunak insisted that British households would benefit from “the biggest net reduction in personal tax for more than a quarter of a century”. He didn’t mention that before then, their standard of living would fall the most in 66 years, according to the Office for Budget Responsibility. It is not until 2023-24 that the standard of living will return to pre-pandemic levels.
“It’s not Nigel Lawson,” replied Rachel Reeves, the shadow chancellor. “It’s Ted Heath with an Instagram account.”
Sunak had started with a message on Ukraine, saying the UK had to deal with Putin’s “fundamental challenge to our values”. We can only guess what the Russian dictator would have thought of the sight of a finance minister vying to curb his boss’s big-spending instincts and establish himself as a potential successor. We know what he would think of an opposition free to criticize the government after him. Perhaps Putin, unlike Sunak, would have opted for an exceptional tax on the oil and gas barons.
Fiscal policy in a democracy is a messy and fanciful process. But even on a slow day in Westminster it was much better than the alternative.