Sunak’s doubling down on recession will be his political funeral pyre - Brian Monteith
Under the still surface waters the currents below are a torrent feeding into a deep reservoir of anger among many party activists waiting for their moment of retribution on those who brought down two prime ministers they (however reluctantly) approved of and wished to see continue.
Many paid-up supporters are simply cutting up their membership cards and joining Reform UK – which has reported its highest levels of recruitment in the past week. It would only take Nigel Farage to decide to forego his media activity and become directly politically active and that racing stream would no doubt grow into a foaming flood. And to borrow from Led Zeppelin, when the levee breaks “crying won't help you, praying won't do you no good”.
Some may feel I exaggerate, but I have a record in this 13-year-old column of warning, accurately, about the Conservative Party and liberal establishment’s tendency to underestimate the electoral transfers from Conservative and Labour voters to first UKIP and later the Brexit Party.
In the case of the European Parliament elections, as recently as 2019 the Conservatives were placed fifth, behind the Greens on only 8.8 per cent. (In the end I decided to play my own part in that rout as a successful Brexit Party candidate, for the Conservatives had lost all sight of what they stood for, and I know this is how many supporters are feeling again.)
Boris Johnson’s 80-seat majority of 2019 was won on the back of Farage withdrawing his Brexit Party candidates from fighting sitting Conservative MPs in return for Johnson not seeking political alignment with the EU in his yet-to-be-negotiated trade agreement. Without Farage’s informal deal there was every likelihood Johnson would not have won a majority at all but remained as the head of the largest party, with Liberal Democrat candidates instead winning Tory seats (where the Brexit Party would have split the Conservative vote), allowing an anti-Brexit coalition Government to be formed – by Jeremy Corbyn.
The Northern Ireland Protocol, which aligned part of the UK with the EU, shattered that Farage and Johnson accommodation. Now, the decision by the new Sunak administration to abandon plans to repeal unnecessary EU regulations (that Truss had promised to accelerate) atomises it beyond existence.
How short is the Conservatives’ collective memory about what they faced in 2019 and what yet may be faced in 2024 if they work to dilute Brexit or put it at risk? The new party leadership shows callous disregard for how it won its original mandate that put it in power.
That is the Conservatives' political dilemma, but Sunak, Jeremy Hunt, Michael Gove and co risk an economic paradox too – the wholesale disparagement and dismissal of economic certainties to justify their political coup of removing Liz Truss is a racing certainty to deliver a landslide Labour victory.
I wrote here a few weeks ago that an economic strategy of going for growth gave their parliamentary party its best hope of overcoming Labour’s opinion poll lead and winning a (reduced) majority. That strategy has not just been abandoned, it has been put in reverse.
Now we have a Conservative Government openly talking up austerity in the face of a recession to justify spending cuts that will halt growth in its tracks when there is every prospect the deficit's black hole is illusory.
It is bad enough (but to be expected) when His Majesty’s opposition seeks to turn a predictable economic difficulty into a catastrophe – by saying erroneously the Conservatives have crashed the economy – but when a Conservative Government itself propagates the same theory to justify familicide there can only be one outcome – a Labour Government.
A study of the evidence shows that while the mini-budget was politically misjudged in aspects of announcements the forces that impacted on the value of Sterling and UK Gilts were not the “unfunded” £45 billion tax cuts (they would have paid for themselves) but the over-generous and unfunded support for energy prices – which, at £250bn topside, was expected to be up to five times the cost of the tax cuts (if, somehow, they didn’t pay for themselves). Now wholesale gas prices are coming down significantly and the cost of the support is likely to be zero. Whither then the black hole?
Likewise, the impact of the US Federal bank raising its interest rates repeatedly over previous months – and attesting it would do so in November and December – was not the fault of Kwasi Kwarteng or Truss, nor would Sunak or Sir Keir Starmer have been able to act differently.
We have inflation because of the three lockdowns the UK Government entered into by using quantitative easing to fund the shutting down of the economy. Sunak funded them and both Hunt and Starmer wanted them faster, deeper and longer. But you cannot close the economy down and not expect inflation.
Even this week IMF head turned President of the European Central Bank Christine Lagarde said inflation could not be foreseen. Some of us mere scribes were warning of this very outcome two years ago, and yet the UK’s collectivist establishment uses IMF modelling to attack Kwarteng’s budget.
If the Conservatives think adopting corporatist and collectivist lines of attack on supposed mistakes of Truss and Kwarteng will win them electoral support then they only are fooling themselves. It will lose them the support of Conservative voters and, justifiably, seal their defeat.
This Halloween Sunak is an arsonist dressed up as the firefighter. He owns the cost-of-lockdown-crisis – blaming Truss and doubling down on recession will be his political funeral pyre.
Brian Monteith is a former member of the Scottish and European Parliaments and a Senior Adviser to the Tax Reform Council
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