The Chancellor of the Exchequer, Jeremy Hunt, has one chance and one chance only to reset government policy and re-establish confidence in the governments economic policy. It is a an enormous responsibility. The Prime Minister and the rest of the Cabinet are merely bystanders as Mr Hunt works on his measures. Do too little and confidence will not return. Do too much and he will spook the markets and Westminster colleagues alike, and confidence will not return. Confidence is an intangible but substantive thing. We know it when we see it, but it can’t always be just summoned up. Hunt has said he will present his Budget at the end of the month. Well maybe he will and maybe he won’t. If the markets react badly to further delay and instability then he may well be forced to deliver his statement sooner. The government, at this point, is not in charge of events.
His predecessor’s mini-budget in any normal year, given enough preparing of the political ground, should not really have been at all remarkable. This, though, is not a normal year. Nor even is it a normal era. It took an enormous amount of effort by the Cameron government to repair the economic damage wrought by Gordon Brown’s government. Barely had this work delivered some much needed stability than Britain Brexited, causing more years of instability and uncertainty in the process. On top of Brexit, we then endured the enormous financial cost of the pandemic, which is still being felt in levels of borrowing, hospital waiting lists, the incidence of mental health suffering, and other areas. In fifteen years we have undergone three seismic shocks to our economy and our society.
As might be expected this has has been reflected in our politics. For decades the stability of our politics was matched by the weakness of our economic progress. We may have been economically the sick man of Europe but our democracy was a shining beacon of stability to the world. With the democratisation of communications, the falling away of deference, and the unfortunate use of Parliament undermining referendums, our politicians today command much less long-term loyalty and support than their predecessors enjoyed. Now voters are much more willing to shop around, change allegiance, and demand to see results quicker. This in-built instability means parties and politicians have become much more sensitised to prevailing and changing moods. It may or may not be an improvement on what has gone before, but the change is certainly here to stay. A more volatile economy means a more volatile politics and any political party that wants to please voters has to focus more than ever on delivering on a strong economy.
“It’s the economy stupid”, always has been. Always will be you may think. Two things are different. Firstly, environmental conditions are driving a change in voters values. Secondly, despite Brexiting, we have not made – pandemic notwithstanding – the necessary changes in our economic model to address the very different economic and trading circumstances in which we now find ourselves. If we are to try and make Brexit a success then big changes need to occur.
Over the weekend John Allan, the chairman of Tesco, has become the first big business person to say in public what an increasing number of his colleagues have been saying in private for some time – that Labour is beginning to look like a more pro-business party than the Conservatives do. For many Conservatives, this is a completely unprocessable thought. Up until now, if this suggestion is put to them it has been greeted by senior ministers, their advisors and many MPs with incredulity and dismissed out of hand. The wiser ones though know it to be true. Nor is this something that has suddenly happened with the arrival of Liz Truss in No 10. It has been going on since Theresa May walked into No 10 and accelerated under Boris Johnson. The Conservative Party, once indisputably the party of business and enterprise, is now awakening to the realisation that there is a yawning chasm between it and the business community. Business turning to Labour has happened before in recent memory, in the run-up to the 1997 General Election. It is happening now.
