This article is the site version of our Inside Politics newsletter. Sign up here To receive the newsletter delivered directly to your inbox every weekday.
The biggest and most important story in Britain right now is, full stop, how dire the economic picture is. The same is the case with politics. A few thoughts on that, plus, inevitably, the latest on race to number 10 and what I gathered from spending three hours on the phone with Tory members this week.
Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb And please send gossip, ideas and feedback [email protected].
Liz Truss and the Moody Blues
Britain is sliding into a 15-month recession and further high inflation, according to the Bank of England, which has raised interest rates by 0.5 percent, the highest increase in 27 years.
Here is a key paragraph from the Monetary Policy Committee’s latest report:
The labor market remains tight, and domestic cost and price pressures are high. A prolonged period of externally generated price inflation risks leading to more persistent domestic price and wage pressures. Considering these considerations, the committee has decided to increase the bank rate by 0.5 percent to 1.75 percent in this meeting.
The bad news is that the MPC has essentially concluded that the UK economy needs both a sharper recession and a rise in unemployment to keep inflation under control. On the contrary, this is good news for fans of highly dangerous charts. Here are some of the best (or should that be the worst?) from Delphine Strauss’ Essential Explainer.
The Resolution Foundation has also charted an approach to our take-home pay. It shows that average after-tax household income will fall by 3.7 percent in 2022 and 2023. This means households will be almost £2,000 worse off over two years:
Its politics are bad for the UK government, obviously.
There are two results that are worth touching on briefly. To begin with, this is the first time since independence that the UK Central Bank has felt the need to reach for this much painful lever, and we should expect some political resistance as a result.
It is difficult to know how seriously to take suggestions from Liz Truss’s aides about the future and exact size of the BoE mandate, and the Foreign Secretary’s insistence that the UK must avoid a recession.
If the survey of the Conservative membership is correct – and I see no persuasive case for why we should doubt it – Truss has successfully portrayed Rishi Sunak’s budget and the BoE’s slowdown as the twin causes of Britain’s economic malaise. “A recession is not inevitable,” Truss insisted in yesterday’s TV debate, pledging to reverse Sage Sunak’s tax hike plans.
And on a broader point about the BoE mandate, it’s hard to work out exactly how difficult, and how serious, Truss’ position is to try to undercut accusations that he is a candidate for high mortgage payments and weak fiscal policy. A sign of great change to come.
The second issue is the timing of the UK’s next general election. When the economy is bad, incumbent governments let parliament run the gamut, hoping something will come of it.
As I’ve written before, under the terms of the Dissolution of Parliament and Summons Act, which returned the power to call an election to the UK executive and away from the legislature, the absolute latest that the next election could be held is January 2025. This provoked a number of furious reactions from MPs and party workers of the “I’d rather have a glass than preach at Christmas” variety and the following smart response from a Conservative grandee:
Yes, it would be legal, but Christmas, Epiphany (Orthodox Christmas and you don’t want to disappoint Greek Cypriot voters in Barnet and Harrow!), Chanukah. Adding to the pressure on primary schools and village halls for Christmas events, local authorities are updating registration after the annual canvass and Christmas post irregularity.
No party campaigning on the public at Christmas will be lightly forgiven! All in all, I think the last realistic date would be early November 2024, with the campaigning at the party conventions already underway.
That assessment seems right to me. I note that one of the reasons political betting sites chatter about early elections is that you can even make a plausible case for going into November. of this year. You can see how Liz Truss’ promised emergency budget cuts taxes, heavily subsidizes households through this winter’s rise in energy bills, and creates a short-lived feel-good factor around her government.
The risk of truss going to the country in November this year is extremely high. That being said, you can make a completely watertight argument that the government’s political position will get worse over time rather than better.
But if Truss goes to the country too soon and her majority drops to 10, or she loses the post, no one in the Conservative Party will thank her when all the economic indicators point to the party being in worse shape. They waited until later.
For that reason I think the most likely date for the next election is in the winter of 2024. But we should not deny that Truss’s moment of maximum opportunity will be this autumn when he decides to seek a new five-year term. , rather than risk an election at a time not of his choosing after several years of bleak economic news.
But, is the referendum correct?
Since my last note on Tuesday, Liz Truss has had a two-fold boost in the polls: another YouGov poll showed her widening her lead over Rishi Sunak, while ConservativeHome’s Impractical Readers panel also showed her ahead of the former chancellor.
How seriously should we take these things? Well, YouGov’s poll of party members has been right every election. However, they underestimated David Miliband’s strength among ordinary members in the 2010 Labor leadership contest and overestimated Boris Johnson’s appeal to Conservative activists in 2019. In no case was the error sufficient to erase a winning lead.
As for the Conservativehome poll, to be honest, I take it seriously given that earlier this week I spent about three hours on the phone to Tory members and found 60 per cent of the people I spoke to. Vote for Truss.
My contact book, like the ConHome survey, is not weighted to anything, and neither I nor the ConHome team can say with any credibility that our respondents are a representative sample of the party’s grassroots as a whole. But taken together, they both suggest that YouGov’s polls are right, give or take.
I’m a regretful cynic, I take the view that any political campaign worth its salt will try to mislead journalists about how well they’re doing, and so you should always treat the campaign for what it is. doing It’s as important as what it is saying. And sure, Truss allies will talk about how there must be no complacency and that they have a big fight ahead, while Sunak’s campaign claims they are closing the gap.
But look at what these two campaigns are doing. Truss Camp has stuck to the same core themes that it had in this competition and is considered a winning formula. Its response to the BoE’s rate hike was to talk about the Foreign Secretary’s plans for an emergency budget.
In contrast, the Sunak campaign has leapfrogged everywhere: it started as a campaign not to cut taxes immediately and now promises to cut VAT in the short term. It has pledged to extend the reach of the UK’s counter-terrorism strategy to include those who “offend” the UK and its major response to the rate hike was an attack on Liz Truss.
Sometimes politics really is as simple as it looks. I am forced to think that this fact is the campaign of Rishi Sunak seems Like it’s trying hard to find new policy announcements to win over more members and attacking another person when it’s a sign that his campaign is in trouble and the polls are right.
Try it now
There are two things worth looking at here.
first, Hit the road A film about an Iranian family traveling across the country. It’s cleverly told from the perspective of the youngest child in the family, at first it sounds like it might be overly cute and gratefully twee but slowly reveals itself to be quite sophisticated. It’s hard to write about the movie in a way that does it justice without spoiling it too much, though Danny Leigh’s review does a pretty good job of it. All I can say is that this is a very clever, moving and beautifully shot film that I heartily and wholeheartedly recommend.
Not in cinemas but available to stream: Orville TV series. It’s a very enjoyable light sci-fi, which begins life essentially as “toilet humor with Star Trek” before becoming funnier and more thoughtful in the second season. It just finished its third season and continues to be a very enjoyable way to spend an evening.
Have a great weekend, however you spent it.
Today’s other top stories
Newspapers recommended for you
Swamp notes – Expert insight into the intersection of money and power in American politics. Sign up here
Britain after Brexit – Keep up to date with the latest developments as the UK economy adjusts to life outside the EU. Sign up here