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The Guardian - UK
The Guardian - UK
Comment
Rafael Behr

Even Tory voters won’t be fooled by the tax cuts in Jeremy Hunt’s fairytale budget

Jeremy Hunt sitting at a desk in an office, with Rishi Sunak standing next to him. Hunt is looking up at Sunak and both men are laughing. The office walls are painted red and there are bookshelves on the wall behind Hunt. A framed photograph of Nigel Lawson holding the red dispatch box hangs on the wall behind Sunak.
Jeremy Hunt and Rishi Sunak in the chancellor’s office at No 11, as they prepare for the budget statement on 6 March. Photograph: Simon Dawson/No 10 Downing Street

It is one of the standard nightmares. An unseen predator is bearing down on you but your legs won’t move. Terror surges up from your lungs but you can’t scream. Is that how Rishi Sunak feels about the electoral reckoning at his heels? He pulls policy levers, pushes rhetorical buttons, makes speeches, resets and relaunches, but the polls won’t budge. Defeat is breathing down his neck.

The rest of us are having another common nightmare. It’s the one where you urgently need to be somewhere – an exam, a job interview, a hospital appointment – but everything conspires against you. The roads are gridlocked, the time of your appointment is changed at the last minute, your train is cancelled. You need to buy a ticket but the machine is broken, the counter is shut, your wallet is empty.

The prime minister can’t escape his nightmare while we are living in ours. Budget day convention dictates that Westminster collectively pretends the government’s fate can be changed by a stroke of the chancellor’s pen. Conservative MPs must imagine that another tax cut, more electric than the last, will jolt the public awake and stop the nation sleepwalking towards Labour rule.

There are cultural trends forbidding the conclusion that it is already too late for the Tories. Labour’s paranoid fear of squandering its advantages, bolstered by a historic expertise in self-sabotage, is one. Another is media appetite for narrative twists, fed by recent memory of intense volatility. It feels safest to assume that no bet is safe.

Balanced against those judgments are the facts of life in Britain in 2024. It is a battle to get simple things done in a degraded public realm. Almost everyone feels poorer today than they did when the Tories took power 14 years ago. It is a long time to be cycling through phases of dizzying crisis and glum stagnation.

Spinning around without going anywhere is the most nauseating motion. People are sick of the Conservatives. It is a feeling deep in the gut that won’t be shifted with a sugar-rush tax cut, especially if it comes at the expense of public investment.

Opinion surveys indicate stronger demand for spending on knackered services than tax giveaways, even among Tory voters. People may not be following the exact mechanics of the rule-bending, column-shuffling trick that generates the “headroom” for Jeremy Hunt to “afford” lower headline rates of taxes, but they intuit that the money has to come from somewhere. They have bumped along rutted roads that used to be smooth carriageway. They can’t see their GPs and wait all night in A&E.

The projections of future spending that let the chancellor declare himself obedient to fiscal rules are a fiction. Forcing the curve of public borrowing relative to gross domestic product on to a downward trajectory by 2025 would involve a squeeze on budgets that would, if enacted, destroy services that are already struggling to function.

It might be technically possible to wring another 20% of savings out of the justice department, but not with courts and prisons worthy of a developed country. In theory, the Treasury could further reduce central government grants to local authorities, but only if it wanted to drive more of them into effective bankruptcy.

Activating section 114(3) of the Local Government Finance Act – the emergency trigger that councils pull when they can’t make ends meet – used to be an exceptional event. It happened three times last year. A recent survey of councillors found nearly one in 10 expected to hit that threshold in the next financial year. More than half saw it coming within five years.

Hunt may believe there is money to be saved by shrinking incapacity benefits, and that claimants will then be nudged back into the labour force. The actual cost will be people with chronic health conditions sliding deeper into poverty and despair. That puts more pressure on the NHS, which is already raiding its capital budget to plug shortfalls in day-to-day spending.

The chancellor’s game of fantasy accounting is played by rules that allow him to balance the books by tipping the country towards social insolvency. But he knows that will be Labour’s problem soon enough.

This is the dirty paradox of a budget drafted in anticipation of defeat. The Tories write an oath of fiscal responsibility for the opposition to recite, which no one expects the government itself to honour. Rachel Reeves will be asked how Labour would pay for its manifesto promises if not by restoring the taxes that Hunt is cutting. The corollary question – which of today’s essential public services does Hunt intend to scrap? – goes unposed. Hunt won’t be the chancellor this time next year and Conservative-supporting media don’t care to ask him.

There are two electoral tactics here. First is the hope of mobilising deep-rooted public suspicion of Labour as the party of fiscal incontinence. Second is a redefinition of success for the Tories as damage limitation – salvaging enough seats to be competitive in opposition.

When the general mood has turned against Sunak, his best hope is precision targeting within the narrow subset of voters who haven’t given up on him entirely. In that shallow pool, officiously monitored by Conservative MPs, swim the people who care most about tax cuts.

The same logic keeps Downing Street hyper-attentive to marginal voters who swung behind Boris Johnson in 2019 and are now floating towards Reform UK. That means indulging a radical rightwing caucus in parliament that treats the prime minister with open contempt. The consequent fixation on migration as a national scourge alienates people who might once have considered themselves mainstream Conservatives.

The fork in the road that led Sunak to a credible re-election programme on the centre ground of British politics is behind him. It would be a brave leader who, at this late stage, switched his focus away from the margins where people say they might still vote for him in order to patch things up with the masses who say they definitely won’t.

But the audience that most hungrily demands what Sunak and Hunt claim to be serving them will soon complain that the portion is too small. Everyone else will wonder what happened to their share.

If budget day goes to plan, there will be a rash of positive headlines and, in the best-case scenario, a spate of ritual speculation about a Conservative comeback. Meanwhile, the overall tax burden will still be high and public services will still be broken.

People will still be afraid to get ill because they don’t think the NHS can cope with one more patient. Food banks will still be busy. Potholes won’t be filled. What will it all have been for? Not just the budget, the 16 months since the current prime minister moved into No 10 and the 149 months of Conservative rule before that. What, actually, was the point of it all? There is a question to keep Rishi Sunak up at night.

  • Rafael Behr is a Guardian columnist

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