The problem with Austerity II is that we’re not all in it together

Rishi Sunak set out a reasonably coherent economic strategy for the rest of the parliament at his Budget this week. Not that you’d know, because it was buried well within the speech and neither media nor politicians have sought to engage on that level.

This is a mistake from the government but is typical of its lack of strategic thinking and inability or unwillingness to develop an overarching co-ordinated narrative.

When the Tories came into power in 2010, they’d set their stall out since the Financial Crisis that (1) the nation’s finances needed restoring into balance, (2) Labour had failed to fix the roof while the sun was shining, and (3) in sorting out the problem, we were all in it together. Leave aside the economic arguments here: politically, that was a coherent narrative that described the economic strategy the Tories sought to implement. As it turned out, they’d do this alongside Lib Dems but that made little to no impact on either the messaging or policy.

That combined message proved so powerful that it not only won the argument in 2010 but 2015 too. It justified and provided a mandate for the austerity programme, defined its terms of success and explained to the public why the pain was necessary and what the benefit was that would ultimately be derived. Crucially, that third point emphasised that the pain was shared. Again, whether it was or not isn’t the point here: the point is that the Tories were very careful to appear inclusive. And it worked.

A decade and more on and the usual trend of long-serving governments has asserted itself. Successful oppositions have to explain from first principles their plans because that’s how they convince the public that it’s safe and worthwhile to change the government. Parties in power tend to forget to do those basics, either from lack of time, lack of political imperative, fatigue or just the simple assumption that their internal consensus is so widely shared that they don’t need to – although given the changes in the Conservative Party over the last 11 years, whether that consensus even exists within Downing Street is an open question.

However, we’ll find out soon because going back to that first point, after a period of borrowing well beyond those under Gordon Brown, there must be retrenchment – which in turn means there will be losers in the process. Some are already known. Larger (profitable) businesses will be paying more in corporation tax and the Chancellor’s old friend, fiscal drag – letting inflation and growth erode allowances and thresholds – will be returning. So far, so not-very-controversial.

The one that’s already jarring, and which Labour has for once pounced on, is the projected 1% rise for NHS staff; an increase which is currently above CPI inflation (0.8%) but may well not be for long and which in any case pales beside the 2.5%+ that the triple-lock ensures the state pension will increase by. It also looks pretty mean when set alongside the large amounts given to suppliers and contractors who didn’t adequately deliver during the Covid crisis, or the £200k or so the PM is spending doing up the living quarters in No 10 (which is both a trivial amount in the scheme of government spending and a huge amount to spend on decorating a flat). Put simply, we’re not all in it together.

If Labour had had its act together, it would have gone much harder for the last year with the line “one rule for them; another for everyone else”, which feeds into so many of the government’s actions and which, alongside “they don’t know what they’re doing”, could form an enduring criticism. While Labour’s toyed with the line, it’s not been repeated often enough to stick in the public’s consciousness. That wouldn’t have happened under Blair and Campbell.

As a result there’s a huge gap into which either party can step and write the political narrative to drive towards 2024. The Tories, as the government, have the greater opportunity because they can reinforce the words with real action; the opposition will always, to an extent, be reactive. But they need more than the managerial approach Sunak set out this week; they need to explain in one or two simple straplines what they’re doing, why it’s fair and why it’ll be beneficial – and then they need their actions to match their words.

Who will succeed? On the one hand, Johnson has never been a model of consistency or disciplined strategic thinking but does have a knack for a memorable phrase; on the other, Starmer and Dodds, while often making valid points, do so in such a way that hardly anyone notices and which don’t tie individual events into a larger picture.

It’s an odd situation: not so much impasse or stalemate as want of trying – or even awareness of the need to try. As such, I find it very hard to make a call on who will set the running. It should naturally be Labour given their opportunities and what’s still a lack of cohesion within the Tories, both as a parliamentary party and as a government (though that’s improved since Cummings left). But with Labour’s current front bench, I don’t think it will be. Which is a problem when polls put you behind by double-digits and the left is restless and agitating.

David Herdson