“There is only one bill that matters and that’s the finance bill”, says a former minister about Tuesday’s Queen’s Speech. The government’s legislative programme has a mix of good ideas, bad ideas and some which might prove valuable in the future. What it does not have is anything to restore Tory electoral fortunes.
In fairness, these occasions rarely move the dial. But this one has been used by Boris Johnson’s Downing Street team to fortify his position by sharpening political dividing lines with so-called “wedge issues” which animate activists and appeal to the Brexit voters. Measures that alienate supporters or with little political punch, such as audit reform, have been diluted or delayed in favour of “red meat” legislation.
The need for a new approach was amplified by last week’s local elections, which saw heavy Tory losses to the Liberal Democrats and, to a lesser extent, Labour, in the south of England. The temptation is to double down on cultural divides, new Brexit conflicts and strong policies on crime, immigration and public order.
The flaw with this plan is that it does not address the issues which caused the defeats: the cost of living crisis and the fact that “partygate” has made Johnson a drag on the Tory vote.
A further weakness is that the losses have revived fears about the southern “blue wall”, the theoretical obverse to the northern “red wall” Leave-voting seats the Tories won from Labour in 2019. The pollster Steve Akehurst defines the blue wall as 41 seats held by the Tories since 2010, with majorities below 10,000 and where Labour has outperformed the national swing. These are largely Remain-voting constituencies, some of which have seen an influx of younger families fleeing cities to find affordable homes.
While accepting that some areas like Worthing and Woking may be susceptible over time, leaders dispute the notion of the home counties as a hotbed of liberalism. They say private polling shows wedge policies are popular with southern Tories too.
Yet as the ex-minister suggests, this misses the bigger picture, which holds from blue wall to red. Polling shows no issues have close to the same salience for voters as inflation and the economy.
The analysis is shared by one cabinet member. “What matters is whether we can get back to a low tax, higher growth economy. Rishi and Boris assure us that what’s happening now is only temporary and normal service will soon be restored. We await with anticipation.”
One southern Tory goes further: “The problem with wedge issues is you end up doing trivial things, like privatising Channel 4, and everyone asks ‘why doesn’t the government care about the things I care about?’” The MP adds: “In Kent, Surrey, Sussex, people are mildly disgusted with partygate but they want order and competence and this government radiates incompetence.” The limited help offered in the chancellor Rishi Sunak’s Spring Statement left Tory MPs in despair.
Southern focus groups show the cost of living and housing as pivotal issues. Yet households struggling with bills are told to wait for the autumn budget. Planning reforms to force the promised raft of housebuilding have been curtailed to quell local opposition. This is self-defeating: home ownership, on which the Tory vote relies, has been falling among the under-45s.
There is no coherent plan to grow an economy weakened by Brexit and by inconsistency over taxes and trade. Ambitions on levelling up and energy security face doubts over delivery amid internal disputes. In as far as the Queen’s Speech offers an economic direction, it is away from interventionism and towards long-term supply-side reforms and deregulation.
While other issues may cheer activists, they are a sideshow. The overwhelming political imperative is inflation and the need to put more money in people’s pockets. Yet the instinctive but unstated Treasury strategy for tackling inflation is a period of depressed spending, hence the desire to wait even as fears turn from inflation to stagflation. Public services, notably the NHS, are struggling to recover from the pandemic and meanwhile see their budgets eroded by rising prices.
On top of this, in the words of James Johnson, a Conservative pollster, the leader is toxifying the party. “As long as Boris Johnson is the messenger, voters won’t listen” he says. James Frayne, another favoured pollster, writes that while Labour’s weakness keeps the Tories competitive “another Conservative leader might do a lot better”.
So if Johnson seeks a meaningful tactic he has only one option, income tax cuts. It will cheer his MPs. It is even a good idea. Extra energy subsidies or welfare are useful but not policies where he can outbid the opposition.
Tax cuts might also restore what was once a Conservative selling point — until Sunak raised the burden to levels not seen since the 1950s. It is not a complete plan, far less an economic strategy. But if Johnson wants impact on an issue that speaks to voters real concerns, tax cuts large enough to draw a dividing line with Labour are the best bet.
So the cuts are coming. Johnson is planning them even as he stresses the limits of government help. Labour has already demanded a mini-budget and many Tories are uneasy waiting until voters are feeling even more pain. As the economic and political pressure mounts many wonder if Johnson’s nerve can hold till the autumn.
robert.shrimsley@ft.com
Source: Economy - ft.com
