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4 October 2021

Rishi Sunak is haunted by the ghost of Christmas present

As the Chancellor contends with chronic shortages and a living standards squeeze, his fear is that voters’ patience may run out.

By Tim Ross

Rishi Sunak’s speech to Conservative Party conference comes at an awkward time. With shortages of goods in shops and petrol at the pumps, the Chancellor has had to concede that the wintry 1970s atmosphere of national gloom might not lift in time for Christmas.

After Boris Johnson promised the nation a normal festive season last year, only to backtrack on this as Covid-19 cases surged again, the prospect of families being unable to put the traditional turkey and trimmings on the table is alarming for many Conservatives.

On top of that, inflation is rising and could reach 4 per cent by the end of the year, which will make Christmas even more expensive than normal. Add in a £1,000-a-year Universal Credit cut and tax rises from next April and millions of voters suddenly face a cost-of-living crunch worsened by government decisions. It is a major political challenge for the Conservatives, and especially for Sunak, as he prepares to deliver the Budget later this month.

Speaking to the BBC before his speech in Manchester, the Chancellor said he understood how “frustrating” the disruption to supply chains was for consumers. Sunak’s argument is that it’s not the government’s fault. Pandemic lockdowns around the world have hit capacity at ports and the relatively rapid reopening of economies has driven a surge in demand that has been hard to meet.

“There’s nothing I can do about a decision by a country in Asia to shut down a port because of a coronavirus outbreak,” Sunak told BBC Radio 4’s Today programme. “We can’t wave a magic wand and make global supply chain challenges disappear overnight.”

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[see also: Boris Johnson argues the pain of shortages is worth it – is it?]

Boris Johnson has a rare ability to defy political gravity and his government has benefited from that. The Conservatives even fractionally extended their poll lead over Labour in recent days, despite the ongoing shortages and a better-than-expected performance from Keir Starmer in Brighton last week.

But there are indications that voters’ patience may not last. An online poll of 2,000 UK adults by Opinium published over the weekend found 69 per cent thought the government had responded badly to the HGV driver shortage, with 67 per cent blaming ministers for the current crisis. Perhaps most alarmingly for Johnson, half now think Brexit is having a negative impact on the economy, including 26 per cent of people who voted to leave the EU. More than half – 55 per cent – think Brexit is having a bad impact in the shops, according to the survey.

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Johnson’s 2019 election victory decisively settled the Brexit war and he led the country out of the EU soon afterwards. The Brexit peace, however, is still very much contested. Last week, it became clear that Starmer now recognises this opportunity. He came up with a line that focuses on the question of the government’s competence, telling Johnson that “it is not enough to ‘Get Brexit Done’. You need a plan to make Brexit work.” This poses a real danger to the Conservatives.

The wisest Remainers – including George Osborne – always knew that Brexit was not a vote for economic prosperity. The referendum was won on the basis of an appeal to emotion rather than personal or national finances. It was a promise to restore a certain sense of identity and the ability to “take back control” over the future direction of the country that held sway.

That dynamic worked for Johnson in the referendum campaign when the prospect of future financial pain was abstract, based on the distant predictions of Osborne’s “Project Fear”.  The risk now for Johnson is that 2016 Leave voters feel less loyal to their own referendum decision as time passes and instead cast around for someone to blame for the fuel and goods shortages, higher inflation and the general squeeze on their quality of life.

Five years ago, immigration was the issue that dominated political debate and helped deliver victory for the Leave campaign. Johnson needs to make sure that the next figure of blame is not Brexit itself. That may be partly why Downing Street is reportedly planning to make immigration the key dividing line between the government and Labour again.

Last week, Starmer suggested the government should fill the HGV driver shortage by giving visas to as many as 100,000 foreign workers. Conservatives believe they can use this to paint the Labour leader as soft on border controls and at the same time promise that they are fixing the shortages by pushing businesses to pay British workers more to do the same jobs.

But the adjustment from a low-wage, high-immigration economy to one in which British workers are paid well to do British jobs may not deliver quickly enough to keep the Conservatives out of trouble. As Sunak and Johnson lap up the applause from the Eurosceptic party faithful in Manchester this week, Brexit is still the ghost haunting the Tory feast.

[see also: Rishi Sunak’s Treasury has declared war on the young]