Rishi Sunak bets on a double whammy to hold on to power

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Good morning. The Conservative party has found a song to sing, The £28bn question: a noun, a verb, and a reminder that Labour plans to borrow that amount over the course of the next parliament.

Rishi Sunak’s hope is that that message will revive voter fears about Labour and public spending, while further tax cuts in the spring Budget will give voters a positive reason to back the Conservatives at the next election (sometime in the fourth quarter of 2024).

The double whammy of a Conservative tax cut and attacks on Labour’s £28bn pledge spooks some people in the Labour party. But Keir Starmer has once again repeated his personal commitment to it, surprising many at Westminster, who expected that Labour would retreat from the promise.

Tax cuts for votes

Will tax cuts in the spring Budget turn around Conservative fortunes? Sunak thinks so. (George Parker’s story on the prime minister’s thinking and the early battle lines for the election is here.)

Is he right? I don’t know. I think it’s unlikely. A little over a year ago I wrote that the prime minister should fight the next election not on tax cuts, but on tax rises, on the grounds that a) the upward pressures on UK public spending, from our ageing population to the industrial disputes across the public realm to the darkening geopolitical picture are not going away b) voters are fully aware of a) and therefore c) trying to run on tax cuts will just make the Conservatives look desperate and deluded.

I essentially think that voters think the following things about tax-and-spend. For a long, long, long time they’ve believed that Labour would always spend more and tax more than the Tories. That belief is deeply rooted in everything Labour has done and said for the century it has been the dominant party of the British left and it isn’t going to go away any time soon. And in the present day, I think voters think that any promises from the Conservatives about tax cuts are not likely to be kept. These tax cuts we’re all getting in our pay packets at the end of this month? They will be clawed back after the next election.

And in support of that latter thesis, here’s the first outing for my favourite chart:

The coalition government was able to reduce public spending (and therefore cut taxes), but no subsequent Conservative-only government has done so without having to retreat and/or suffering a big electoral setback. I don’t think this political constraint is going anywhere anytime soon and therefore I think if the Tories did win the next election then, just as Sunak had to raise taxes as chancellor, his post-election pick as chancellor, whoever they may be, would have to do the same.

What Sunak is doing is betting that I am only half-right: that the longtime perceptions of the Conservative and Labour brands are going to outweigh the events of the past half-decade. People will accept that his tax cuts are here for a long time and not just to get the Tory party through a difficult election battle and vote accordingly.

And what Starmer is doing by sticking with his £28bn pledge is betting that people really do accept that he has changed the Labour party (and that climate change makes borrowing to tackle it worth the candle) and that people won’t see the £28bn pledge as the thin end of the wedge.

One way or the other, at least one of them is going to look foolish this time next year.

Now try this

I had a very restorative break: my thanks for your lovely emails, and to Jim, Jen and Lucy for filling in last week, and my apologies to those of you I haven’t yet responded to. Among other lovely things on my break I really enjoyed, much to my surprise, the Mindful Mix Prom.

I must admit when I heard the words “Mindful Mix” my hand went to my imaginary revolver, but it really is a very beautiful selection of music that you can listen to for just 18 more days on BBC Sounds.

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