Rishi Sunak has always been different to the rest of us. A bit smoother, a lot richer. While Britain has been facing spiralling inflation, the chancellor has been grappling with deflation — in his approval ratings. Forget the cost of living, the incredible shrinking chancellor struggles with the cost of living next to Boris Johnson.
So Wednesday’s Spring Statement was a chance for Sunak to roll back the years — two years precisely, to the start of the pandemic when his grasp of basic detail made him a standout figure in Johnson’s cabinet. As we tried to keep our extremities warm, could the chancellor keep his political prospects hot?
For most middle-age men, a Spring Statement means wearing flip-flops on the school run. For Sunak, it meant a 28-minute speech without the theatrics of a proper Budget. No jokes, a couple of policy manoeuvres, a firm but unspectacular delivery. “Borrowing DOWN, debt DOWN,” he said early on.
Sunak is a low-tax chancellor, in the same way that people who play air guitar in their bedrooms are rock stars. He tried his best. He cut fuel taxes by 5p a litre, which means that, when your house is flooded by climate change, it’ll be cheaper to drive far away from it.
He boasted the government was taking “difficult decisions”, by which he presumably meant a difficult decision to increase national insurance, and a difficult decision to reverse much of it. Having last year celebrated increasing the tax to help fund the NHS, this year he exempted low-earners from paying it.
Sunak’s surprise was a plan to cut the basic rate of income tax, albeit not until 2024. Lord, make me chaste, but not yet. Strengthening the economy “is not the work of any one statement. But it does begin today,” he said, apparently forgetting that the Tories have been in power for as long as the last 10 Chelsea managers.
The performance lacked the swagger of previous Sunak outings. Gone was the infectious bombast of Eat Out To Help Out. Any more action on heating bills would have to wait till the autumn. Nonetheless, Tory MPs were happy enough. On one side of Sunak, Johnson nodded along like Churchill (the insurance dog). On the other, Priti Patel looked sombre, as she often does in the presence of large numbers.
“WE HAVE A PLAN,” the chancellor bellowed. A plan to increase defence spending? A plan to cushion inflation’s impact on public services or on people on benefits? Erm, no. A plan, it seems to hold an election in mid-2024. And people on universal credit don’t tend to vote Conservative, while people who drive cars do.
Overall, Sunak insisted that British households would have “the biggest net cut to personal taxes in over a quarter of a century”. He didn’t mention that before then their living standards would fall by the most in 66 years, according to the Office for Budget Responsibility. Only in 2023-24 will living standards be back at pre-pandemic levels.
“He’s not Nigel Lawson,” said Rachel Reeves, the shadow chancellor, in response. “He’s Ted Heath with an Instagram account.”
Sunak had begun with a message about Ukraine, saying that the UK must confront the “fundamental challenge Putin poses to our values”. We can only guess what the Russian dictator would have made of the sight of a finance minister vying to trim his boss’s big-spending instincts and establish himself as a potential successor. We know what he would make of an opposition free to criticise the government after it. Perhaps Putin, unlike Sunak, would have gone for a windfall tax on the oil and gas barons.
Fiscal policy in a democracy is a messy, gimmicky process. But even on a sluggish day in Westminster, it felt a lot better than the alternative.