Despite the Chancellor’s best efforts and Rishi Sunak’s attempt to reboot the Conservatives’ fortunes, there appears little to be cheerful about for the Tories, says Paul Montague-Smith.
A King’s Speech, a Cabinet reshuffle and an Autumn Statement. November was an important month for Rishi Sunak to set out his priorities and programme for the final year or so until the next general election. Does it provide a platform for a Conservative recovery? It’s doubtful, to say the least.
The King’s Speech contained twenty-one pieces of proposed legislation, much of which was about ticking off commitments made in the 2019 Conservative manifesto.
They included a Digital Markets, Competition and Consumers Bill to tackle online rip-offs and dodgy business practices, including fake reviews and subscription traps (carried over from the last parliamentary session). A bill to implement a new post-Brexit data protection regime, so hopefully no more interminable cookie notices on each web page you open. There were also five criminal justice and security bills covering sentencing, police powers, terrorism and victim support.
The bills that got the most attention were the proposed generational tobacco and disposable vape bans, as well as those on leasehold and renters’ reform. Important, but unlikely to be implemented and felt by voters within the next twelve months. Other bills – covering arbitration, London pedicabs, football governance, petroleum licensing and the ‘Economic Activities of Public Bodies (Overseas Matters) Bill’ – are hardly going to set the political world alight.
The clear take away from this final legislative programme for this Parliament was that Rishi Sunak is using the remaining time to tick off manifesto commitments and address some important but electorally dull issues. Nothing to move the dial here then.
What of the reshuffle? The Prime Minister was always going to refresh his team before the election, but with a Home Secretary too controversial for comfort he moved to replace her, reshaping his Cabinet to be more centrist. Along with the sacking of Suella Braverman the recalling of David Cameron as Foreign secretary grabbed the headlines. As Prime Minister you spend a significant amount of your time dealing with foreign leaders and international issues.
With Cameron as Foreign Secretary, Rishi Sunak will be hoping he can delegate most of that, freeing up precious time to focus on his domestic priorities. However, reshuffles themselves don’t move the dial in voters’ minds. What it has done is upset the right of his party. Suella Braverman’s excoriating resignation letter accused the PM of welching on a deal he made to secure her support. She says he agreed to a document with four key policy commitments, including on immigration.
His aides say there was just a general discussion and no agreement was made. If hard evidence of a betrayal emerges it could prove very tricky for the PM, but in any event, it has widened a rift with the right of the party, while reinforcing perceptions amongst voters that the Conservatives are far from united. People don’t tend to vote for disunited parties.
The final set piece event of the month was the Autumn Statement. The Chancellor used pretty much all the extra headroom he had available to him. To placate the tax cutting right of his party and to incentivise employment he gave a tax cut of in the form of reduced National Insurance. He also made permanent the full expensing of investment in plant and machinery, with a view to improving the UK’s dire productivity.
Maintaining the triple lock on pensions will help keep predominantly Conservative voting pensioners onside. But despite rising wages and pensions, most people will probably still feel worse off in the year ahead. Even though the measures announced by the Chancellor reduced the tax burden by half a percentage point, previous budget measures mean it still rises in each of the next five years to a post-war high of 38 per cent of GDP. Inflation and interest rates are staying higher for longer than originally forecast and growth is set to be a paltry 0.6 and 0.7 per cent over the next two years.
If elections are primarily ‘about the economy stupid’, there was nothing in this statement to move the dial. In reality, though, the Chancellor had little room for manoeuvre and couldn’t afford to spook the markets like his predecessor. He’s more likely to take a gamble in the Spring.
The day before the Autumn Statement the Chancellor announced a £320 million plan to drive innovation and unlock the first tranche of investment from his Mansion House Reforms, including pension fund investment into innovative UK companies through the British Business Bank.
The Autumn Statement itself reiterated the Government’s intention to enable pension schemes to invest in more diverse assets, to see a more consolidated market and better outcomes for savers. Time will tell whether their reform agenda will have the take up and effects envisaged, particularly in terms of better returns and value for pensioners and higher growth in the economy.
December itself looks set to be quiet in comparison to November. Parliament rises for Christmas on the 19th. The Second Reading debate of the Finance Bill, implementing Autumn Statement measures, is yet to be timetabled but will probably be before the Christmas break.
The Chancellor appears before the Treasury Committee to take questions on the statement this Wednesday. If you have some time to spare, it could be worth a watch, if only to see if the committee members from the opposition parties can get him to discard his usual calm demeanour.