This week Sajid Javid played another political blinder. He was the first to offer his resignation from Boris Johnson’s government, tipping Rishi Sunak into action, which in turn caused a resignation stampede. It is the former Chancellor who has taken the main brunt of accusations of disloyalty, but it was the then Health Secretary, who acted first on July 5. This Wednesday, at a key moment for Liz Truss’s campaign after a serious stumble, with a rapid U-turn on an ill-pitched regional pay boards policy, Javid struck again. He sank the knife into his friend and Treasury protégé “doomster” Sunak and came out in support of Truss and her boosterism tax cuts and spending.
The timing was impeccable. The boost to her campaign also came ahead of a day of dire economic reckoning, set to send anxiety rocketing among the populace who cannot vote in this race. (One wonders who is advising Javid, himself a former protégé of George Osborne, as he’s beginning to look like the knife-wielding pawn in other people’s games, with Javid likely to be the biggest loser). Yesterday, the Bank of England announced the biggest interest rate rise in decades, amid warnings of a recession to last five financial quarters, starting before Christmas. Inflation, meanwhile, is forecast to rise to between 13 and 15 per cent. Ofgem had further gruesome news: the regulator announced household energy prices will be set every three months not six, meaning another price cap could rise to £3,359 from October, getting higher in January again.
The Truss camp will be desperately hoping to push Sunak to relinquish the fight, through the sheer weight of momentum coming from polls and politicians switching their allegiances to the front runner. Economic headwinds are looking ever more nightmarish and promising £80 billion in unfunded tax cuts and spending, almost none of which is tackling the cost-of-living crisis, will mean Truss is increasingly open to accusations she is following Johnson’s chaotic “have your cake and eat it” populist politics. Members love her now, but traditionally they also admire “sound money”. With four weeks to go, the mood could swing again. Unlikely, I know, but Sunak’s doomster realism may look like wisdom, not pessimism. And a practised crisis Chancellor is more of a winning bet in an economic storm.
Meanwhile, back in the real world, autumn’s woes are ruining our normally balmy August. Those running small businesses are likely to be suffering panic attacks, looking at reduced consumer spending, higher bills because of inflation and no one to fill job vacancies. Every day, the leadership contest looks more out of touch. Truss announced this week that she will keep the triple lock on pensions, aligning it to inflation (another bit of cake to members), and hinted that she will end the windfall tax on the energy companies making record profits. Sunak ended up talking about expanding Prevent. And Johnson went on holiday.
There are warnings of the spectre of civil insurrection and the energy crisis becoming a poll tax moment. A re-run of the Poll Tax “Don’t Pay” campaign has become a reality, with 7,000 signing up to a 2022 remix, which asks people to pledge to cancel their direct debits by 1st October unless bills are set by the Government to an affordable level. Sign-ups could increase simply because the electorate want to vent their fury at what seems like total disconnect in Westminster. What I am still not hearing from either candidate is a realistic five-point plan they will implement from September 5 for tackling this crisis. Members should withhold their vote until they get it. For our sake.
