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30 November 2023

Rishi Sunak should stop trying to appease the Tory right

Conservative MPs make impossible demands and then complain when those demands are unmet.

By David Gauke

It is the same old story. Whether it is the debate about tax cuts or the row over immigration policy, the same dynamic applies today as throughout the Brexit years. The Conservatives are trying to reconcile the demands of their electoral base and parliamentary party with the need to govern sensibly. And, as can often be the case, they risk failing to achieve either objective.

Until relatively recently it was clear that Jeremy Hunt did not intend to cut taxes in the Autumn Statement. Two things, however, changed. First, the Office for Budget Responsibility (OBR) upgraded its assessment of the public finances because of higher inflation. Rising prices bring in more tax revenue and increase the cost of running public services but if you are content to ignore the latter (and the government, for the moment, is) you are left with some headroom to cut taxes while still meeting your fiscal rules. Second, the call for tax cuts became louder, in part because of panic at the Conservatives’ ongoing travails in the polls, and partly because the right of the party felt punished by the cabinet reshuffle (in which Suella Braverman was sacked and David Cameron brought back).

So Hunt spent £20bn on tax cuts, albeit tax cuts that were rather worthy and unpolitical (a 2p cut in National Insurance and “full expensing” for business investment). What is more, journalists are being briefed that this is only the start. Come the spring Budget there will be more tax cuts, but this time less worthy and more political.

Perhaps that will happen, but the Chancellor is going to need some luck. There is little headroom left (just £13bn or 0.4 per cent of GDP) and the priority will be to cancel April’s scheduled fuel duty increase. If the public finances head in the wrong direction (moving closer to the Bank of England’s assessment than the OBR’s), Hunt will have to announce even more implausible spending cuts, abandon his fiscal rule on debt reduction or impose tax rise. Talk of an inevitable income tax cut is wide of the mark.

On immigration, many on the right are outraged by record net migration of 745,000 last year and 672,000 in the year to June 2023. As it happens, the overall number is likely to fall but there are plenty of Tory MPs – including the Immigration Minister, Robert Jenrick – calling for dramatic action to tighten entrance requirements. That is all very well but identifying specifically who should be barred is no easy task. Care workers? (145,000 health and care worker visas were issued in the year to September 2023.) We could pay care workers more in a bid to attract more domestic recruits but that will make further tax cuts even harder. Keeping immigration numbers down comes at a cost.

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[See also: Louise Casey: The Tories are done – and they need to go away for a while]

The real political struggle is over the numerically smaller issue of illegal immigration. The government’s approach has been to place great weight on its policy of deporting a few hundred asylum seekers to Rwanda in the hope of discouraging many others from coming. This policy was always going to be vulnerable to a legal challenge and so it proved. The government believes it can legislate its way out of its predicament; many Conservative MPs think that this will only work by disapplying the European Convention on Human Rights and numerous other parts of domestic and international law. This would be an approach that would create a whole host of problems for our standing in the world and the Northern Ireland peace process. Ministers have been advised, I understand, that this could potentially leave UK officials travelling abroad at risk of prosecution for years to come.

James Cleverly, the new Home Secretary, sought to provide some perspective to this debate, arguing that there is more to the government’s “stop the boats” campaign than Rwanda and that leaving the ECHR would make it harder to cooperate with other jurisdictions. Sensible, practical and true, these comments inevitably attracted much criticism from those on the right. 

They state that a tough Rwanda policy was promised and that’s what must be delivered, regardless of the practicality. That’s what “our voters want” and that’s what must happen. It is all too reminiscent of the Brexit years when legal, diplomatic and economic realities were not permitted to intrude on delivering “the will of the people”.

It is all a horrible mess. Pursue policies that run a risk of spectacular failure (by losing market credibility or because they cannot be achieved under well-established legal frameworks) or operate within the constraints of the world as it is and be accused of selling out.

The temptation is always to play for time. Caution today is combined with the promise of boldness tomorrow. Not now but soon we will do something very radical and never mind the consequences! That is all very well but the right want action now and suspect (one hopes correctly) that people such as Hunt and Rishi Sunak do worry about the consequences. The right is made even more jittery every time Nigel Farage appears on television.

In the end, keeping the right sweet is impossible. It demands that the leadership makes impossible pledges and then complains when those pledges remain unfulfilled.

If Sunak is unlucky, this will come to a head next year just before the general election. If taxes cannot be cut again or flights to Rwanda cannot take off, he will be accused of betrayal. Never mind fiscal credibility or the counterproductive effects of leaving the ECHR; failure to deliver will be seen as evidence that Sunak is weak and unsound, just like most of his predecessors. In the battle between the right and reality, the leader of the Conservative Party usually ends up as one of the losers.

[See also: The Conservative Party is disintegrating]

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