To govern is to choose, the aphorism runs. Jeremy Hunt made many choices yesterday. One was to freeze fuel duty and retain the 5p cut at the cost of £6bn, which is four times the value of Labour’s NHS workforce plan. You might ask, if you couldn’t get to work yesterday, why that money wasn’t being spent resolving strikes, but Hunt chose to appease his back benches instead. Another choice was to give rich pensioners more money instead of the NHS. The Chancellor’s argument was that abolishing the lifetime allowance on pension pots would encourage people back to work. Yet the most common reason people are economically inactive is long-term sickness, not pension rules.
These choices are necessary because there’s little room for manoeuvre within the government’s fiscal rules. The initial headlines about the Budget said the country had “avoided” a recession. But that’s not the full picture. The Office for Budget Responsibility (OBR) report is unflattering about the state of the economy. As I pointed out in my snap analysis (and as Duncan Weldon writes here) the OBR say that the state of the economy is awful, but slightly less awful than it looked in the autumn. We still face the largest fall in the standard of living since records began. Whatever sensible action the government wants to make in science and technology industries, a fall in living standards will plague the Tories chance of re-election. As long as Labour stick to the line “are you better off than you were 13 years ago?” than the party might make some progress.
But there’s a problem for Labour. As Keir Starmer pointed out in his response to the Budget, the government keeps drawing on Labour’s policies. Yesterday’s childcare announcement was the latest one. Hunt’s decision to hand more financial power to the metro mayors in Manchester and the East Midlands resembles Labour’s plans on economic devolution. Indeed, George argues that there’s a quiet consensus building between the two main parties.
Despite criticism around the Illegal Migration Bill, Rishi Sunak is increasingly being perceived as a competent leader. This will make fighting an election on which party is better placed to deliver the same agenda risky for Labour. Starmer may need to be more radical to stand out.
[See also: The quiet consensus: how Labour and the Tories are converging]