'Is That It?' - A Fiscal Illusionist's Grim and Desperate Response to the Cost-of-Living Crisis
When it comes to Rishi Sunak, what you have to listen for - when he speaks - are often the words that he isn’t saying rather than those that are the most apparent.
Sometimes with his statements you’ll see some fantastic headlines - usually the outline of some variation of a cool ITC Avant Garde Gothic or Grotesk; maybe even Nord or some other variation of a Sans Serif font.
And then signed complete with signature.
In the case of Rishi Sunak’s Spring statement, it’s not about what Rishi Sunak isn’t saying.
He just isn’t saying it full-stop.
‘Is that it?’ shouted Jon Ashworth from the opposition front benches - three words that’ll echo and resound around inside Rishi Sunak’s head.
At least one hopes against all hope that they will for the exceptionally wealthy Chancellor.
Dissecting how awful the Spring statement is [which you can read here], is compounded by the fact that the plan itself is 12 pages long and 5 of those pages are… well, they’re blue. Actually.
They’re literally just blue.
What we can read from this - and interpret - is, basically, that the UK is just going to have to suffer and deal with it; take it on the chin - for want of a better idiom - and deal with the stumbling blocks and complications along the way.
Irrespective of whatever the consequences may be. At least in the meantime.
Actually, the approach we take moving forward is rather like the approach Rishi Sunak would have desired the UK take with coronavirus, at least according to Jonathan Calvert and George Arbuthnott’s book ‘Failures of State’ which asserts that Rishi Sunak was the man most responsible for the more disastrous Covid second wave.
[We’ll speak about this at the end]
There’s a distinct callousness in this statement.
A heartlessness that goes beyond the criticism or irksome and simplistic comment you might occasionally read on social media where you can tell that people haven’t given too much thought to what they’re saying, or what has been put before them in the form of this Spring statement:
Biggest income drop since 1956.
Biggest fall in living standards on record.
Tax burden at its highest since the 1940s.
Growth down with the possibility that inflation may hit 9%.
A 1p income tax cut that we will not see until 2024...
…And by then, incomes will be lower anyway.
National insurance threshold up - still the taxes rise, though.
5p off fuel duty - that doesn’t translate to consumers at fuel pumps.
And 5 of the 12 pages of Sunak’s statement are blue.
Solid. Tory. Blue. [#3071b2 to be exact.]
You can read the Office for Budget Responsibility’s assessment here - made prior to the Chancellor’s statement.
It’s… eye-opening.
What’s remarkable, though, is despite the raucous applause in the Commons on Wednesday immediately following Sunak’s statement, serious analysts - from right across the political spectrum, paper after paper, right-wing, left-wing and even chicken wing [bit like me; somebody who is too afraid to say what side of fence they actually sit on] - none of them had anything remotely positive to say about it.
And most telling was that some of the harshest critics towards Sunak’s statement come from Conservatives themselves, who use words like “grim” and “desperate.”
Even architect of some of the more punishing austerity measures during the Cameron/Osbourne years Iain Duncan Smith seemed surprised.
Meanwhile, Boris Johnson congratulates the man who - until Wednesday - was most likely to take his job, in a bizarre scene of unwarranted felicitation that was later met with cataclysmic disapproval.
Sunak’s statement was both grim and desperate, but crucially, it’s also a kick in the teeth [for many - for students, the poorest, working families, for anybody who doesn’t drive, fleet management companies - you name it] - and somewhere, in the crypts of No. 11 Downing Street, somebody is going to try and come up with a jaunty, swish TikTok video or Instagram post hoping that this might all turn around.
But it will not.
Although he says, “the chancellor has done more than I expected”, Money Saving Expert’’s Martin Lewis maintains, for example, that it is still “nowhere near enough”.
Lewis draws on some of the things I discussed elsewhere in a previous article back in February.
Some telling analysis comes from Institute for Fiscal Studies’ director Paul Johnson.
Writing in The Times, Johnson asks:
“Why promise to spend billions cutting the basic rate of income tax whilst going ahead with an increase in National Insurance rates? That will make the tax system both less equitable and less efficient. It will increase the wedge between higher taxes on earnings and lower taxes on pensions and unearned incomes. And wouldn’t that money have been better spent sooner helping those most in need?”
Further reading comes courtesy of the Financial Times’ chief economics commentator Martin Wolf, who writes:
“[Sunak] is leaving most of the hit to living standards unaddressed and the most vulnerable significantly worse off. It is hard to see a good justification for this… [Sunak] will get cheers from supporters…but unless the squeeze on living standards turns out to be smaller than is now expected, the general mood will remain grumpy.”
Some more “grim” - though nonetheless excellent - analysis comes courtesy of the Resolution Foundation whose assessment can be found here - epitomised by this rather telling and depresssing graphic:
The Resolution Foundation also provided a Q&A session, too - which you can [and I’d encourage you to] watch in full below.
In short, it’s fair to say that the Chancellor’s statement has been met with condemnation when it was ‘supposed’ to be a chance for us all to catch our collective breath - and maybe breathe a sigh of relief.
As noted in Podcast #4 on this page the Chancellor used the statement as an opportunity to provide excuses - “it was Covid what made me do it”; or the new one, “it is the cost of the war in Ukraine what made me do it.”
And each time he said it in his Commons speech or attempted to use it as justification, it was never quite as convincing as the Chancellor hoped, and as noted by analysts from the IFS, the Finanical Times and Resolution Foundation, those least sympathetic to the Chancellor’s statement - yet again - will be those disproportionately affected.
Or in other words, the poorest.
Many of whom voted Conservative for the first time in 2019, and do not believe the Chancellor’s fundamental message of “a promise of jam tomorrow rather than sustenance today.”
It was tone deaf, to say the least - but Sunak provides a flow chart, reassuringly.
I say reassuringly.
Sky’s Ed Conway, meanwhile, estimates [“has a hunch”] that:
“[2022] will be the worst year for real household disposable income since the UK rejoined the gold standard in 1925. That was a VERY bad year. It was so bad Churchill called it his worst ever decision, it triggered the General Strike, a naval mutiny (of sorts) and widespread immiseration.
The stolid Ed Conway adds:
“…if that’s the baseline for what we’re facing this year in terms of impact on family finances, that’s not great.”
No.
It isn’t, is it, Ed?
Something that I pointed towards in my last ‘big’ article on Sunak, though - and without trying to repeat it word-for-word - is that despite the facade of respectability and approachability many find with Sunak in the dark chasm of his Instagram persona, he very rarely lives up to real-world expectations.
You have to pay attention to the man (moreso than Johnson or most other politicians) because he’s rather sneaky individual with insidious policies veneered in doublespeak; and he is a remarkably cool operator that if you don’t look too carefully, will leave you without your shirt.
Most visibly [and literally, for the most vulnerable in society], it seems, following his Spring statement.
I pointed towards it in Podcast #4 too. On ‘Zombies’.
Johnson has his ‘Best Since Churchill’ supporters - those ‘zombie few’ who make such hyperbolic [and ridiculous] statements without ever really knowing why they say it.
Rishi Sunak, meanwhile, has his ‘Best Chancellor Ever’ supporters.
The same applies in that people really don’t seem to understand why exactly they’re saying it beyond drawing on the No. 1 ‘Doctorin the Tardis’ novelty hit record he has failed to replicate in the form of the furlough scheme - which as this page revealed, most likely wasn’t even his idea in the first place.
But for those* who maintain that he is ‘Best Chancellor Ever’, they should really pay attention to the Institute for Fiscal Studies and Resolution Foundation.
*All 6% of them.
Not only are Institute for Fiscal Studies and Resolution Foundation pouring cold water all over Sunak’s grand plans, but they’re revealing the Chancellor for just how tone deaf and utterly out of his depth he truly is.
And when they attempted to sell it to people, the Conservatives thought that the best way to convey the 'Man of the People' vibe was by picturing Sunak filling up an ordinary person's Kia Rio at the petrol pumps in New Cross, London, it went horribly wrong and was revealed to be a contrived stunt.
[It was later discovered that unaired footage of the Chancellor’s disastrous PR opportunity featured a motorcyclist walking up to Sunak, pretending to have a drink - in reference to Partygate - and rubbing his fingers together derisively; the footage was recorded though went unaired]
The whole schtick was unravelling as the beleaguered Chancellor went to pay for the petrol [a can of Coke and a Twix] only to fumble his payment details and appear to not know how to make a contactless payment.
Which is reassuring to know about the Chancellor.
The same evening as his statement - and most telling of all - was a phone-in conducted by LBC featuring Rishi Sunak, where the Chancellor was left answering questions from a single mother of two in Crawley, who revealed to the Chancellor:
Rishi Sunak yet again failed to provide any adequate reassurance.
Waking up in the morning, Rishi Sunak made his way over to Sky News where he confronted by Jayne Secker, who asked regarding the Chancellor’s family ties to Russia by the way of Infosys.
[Rishi Sunak’s wife, Akshata, of course, is a major stakeholder in the company owned by her billionaire father and one of India’s richest men, Naryana Murthy - possessing vast and exhorbitant that surpasses even Her Majesty the Queen. Incidentally, this page (exclusively) highlighted some of the political interests Rishi Sunak should have declared back in November at the height of the Owen Paterson scandal relating to Infosys - though he never did]
Looking rather like a rabbit caught in headlights, Sunak appeared flummoxed.
The Chancellor hobbled over to BBC News to be questioned by Nina Warhurst about which food he noticed was rising in price in the supermarket.
When Warhurst said for her that it was crisps, the out-of-touch Chancellor laughed and replied: “I think it’s bread… we all have different breads in my house.”
It got worse for Sunak as he headed to Good Morning Britain where he repeatedly spoke over presenters Ben Shephard and Ranvir Singh, failed to answer many of the questions being asked and then subsequently ended the car-crash interview by repeating the words, “Thank you very much indeed for having me. Thank you so much, bye bye” - in the middle of a question about Ukraine.
It’s no wonder that when he finally ended up on Radio 4’s Today programme, he seemed uncharacteristically tetchy.
The point being - with all of the above - that Rishi Sunak is extremely well-marketed as ‘Brand Rishi’ - but when you start looking into the man a bit more, or subject him to just that little bit more scrutiny, and put him under spotlight - as noted before in articles, he comes undone.
It reveals (in other words) that not is all as it seems with Rishi Sunak, and over the course of around 24 to 48 hours, we saw the Chancellor’s ambition, and aspirations to become Prime Minister, crumble in real-time before our very eyes.
Most damning of all - that served as the final nail in the proverbial coffin for the so-called ‘Best Chancellor Ever’ - was once again the sage words of IFS’ Paul Johnson, who described Rishi Sunak as a, “fiscal illusionist” who will “leave millions worse off.”
That last part - and that description by Paul Johnson - ultimately serves as the rather depressing final footnote to this, even if we can rightly mock the Chancellor Rishi Sunak.
We have to, frankly.
For if we don’t - in a developed country such as ours where 500,000 children are likely to be plunged into poverty as a result of cruel fiscal mismanagement (yet again by the Conservatives) - then the only other alternative is to cry.
I’d much rather be hopeful.
Perhaps even ‘too’ rational.
The public acrimony towards Rishi Sunak’s statement is at a peak - exemplified by the YouGov survey above that indicates that 69% of people believe the Chancellor has not ‘done enough’.
As noted before, his approval ratings are at an all-time low, too.
The likelihood is that we may see a u-turn (or several) on this - and it may come sooner than having to wait until Autumn/Winter 2022 with Tories fearing the backlash will affect the party at local election level in May.
A populist at heart, Boris Johnson - a man who wants to be loved, ‘mothered’ by the nation in a way - will seize on this opportunity, too.
Remember, another factor at play here is the internal war that is still being fought among the backroom apparatchik in CCHQ over ‘Partygate’, and the War in Ukraine has not provided Boris Johnson the appropriate platform or bouyancy to distract the British public.
The impending cost-of-living crisis, by many accounts, has the ability to significantly bludgeon the Conservatives at the polls.
By some small margin, it already has.
Fortunately for Johnson, seeing Rishi Sunak at a disadvantage and left with no option but for Macavity to climb back into his box, the Prime Minister can come back out swinging knowing that the only other real contender in this game of Tory one-upmanship is Liz Truss - although defence Secretary Ben Wallace is winning plaudits at the minute, too.
Indeed, it was only several days ago that former chief whip Mark Harper pointed towards the fact that Partygate has ‘not gone away’ - Johnson is not out of the woods yet.
The Prime Minister may use this as an opportunity to alleviate some of the pressures facing households, and cynically use this as an attempt to over-rule the beleaguered Chancellor when Sunak is at his most vulnerable and unpopular, and constantly at odds with the Prime Minister’s more hedonistic approach to the economy.
Sunak will not, for instance, launch a leadership bid as a result of this - and so seizing on that disadvantage, Johnson may pressure Sunak to do more in the coming weeks before households begin to feel the pinch in April.
Where Sunak would previously have told Johnson “no”, validated by others in the cabinet and favoured by the more right-wing thinktank element within the Conservatives, this time, he may very well say “yes.”
They are under pressure, then - the Conservatives - to deliver more; to make-good of promises on levelling up, and to tackle the impending cost-of-living crisis.
It is not something from a political perspective that they can afford to ignore, and no, not everybody apart from perhaps the wealthiest can afford to ‘take it on the chin.’
That Ed Conway/Sky quote earlier in the article is telling; strikes; disorder.
Alluding to the Gold Standard Act of 1925, which set the stage for The Great Depression in Britain, the country faces a crisis unlike anything we’ve seen in 100 years, and like coronavirus, there is a very real chance of the entire system crumbling.
And like coronavirus, the Conservatives were begrudgingly forced to tackle the crisis against their so-called ‘libertarian’ instincts.
They had no choice but to.
The same may very well happen with the cost-of-living crisis, too, and so irrespective of all the gloom, and all the hopelessness gifted to us by this useless Chancellor on Wednesday, the chances are things will mostly likely change.
History tells us (about the Conservatives) that they tend to eventually go back to the drawing board and rethink their initial strategy - though most of the time, when it is too late.
Doing this in hindsight though, or being left with no choice but to clean up the mess they have left behind, is not indicative of a ‘good government’.
Currently, according to the Joseph Rowntree Foundation, one in five (22%) of the UK population are living in poverty, and that number is going to creep up and bite the Conservatives - with teeth.
Therefore sympathy for the Conservatives (after everything that has happened over these last two years) is in short supply when they offer excuses, and patience is wearing thin when the support they offer - when Britain needs it most - is simultaneously both a kick in the teeth and a drop in the ocean.
There is no appetite in Britain - in 2022 - for ‘stoicism the Conservative way’, and the Conservatives either learn this now or they learn the hard way.