Politics

Why Rishi Sunak May Struggle To Stay Popular As Covid Collides With The Economy

If there were any doubts that Rishi Sunak wants to be prime minister one day, they were surely put to rest by the slick pre-Budget video that briefly set political Twitter alight on Monday.

Big budget social media has become one of the chancellor’s calling cards, and suggests he understands the power of PR as much as Tony Blair did in the 1990s.

But following the worst recession in 300 years and the biggest hole in the public finances since the Second World War, some wonder if the coronavirus chancellor will have to emulate that ex-PM’s political acumen if he wants to maintain his popularity as the crisis turns into recovery.

Mistakes have already been made with the unravelling of Sunak’s Eat Out To Help Out scheme, and his lockdown scepticism being twice overwhelmed by events.

And Tory MPs tell HuffPost UK they are expecting an “horrific” 18 months, once the chancellor’s almost universally welcomed support schemes like furlough end, and the economic impact of the pandemic starts to bite on businesses and jobs.

The chancellor is now drawing flak from both Tory backbenchers and Labour for going into Wednesday’s Budget warning of tax rises, with government borrowing forecast to hit £394bn this month.

Here’s What We Know So Far About Rishi Sunak’s 2021 Budget

But while many expect him to put off the most difficult decisions until the autumn, Tories are keen for Sunak to set out his “grand plan” for the future.

The path he chooses could be crucial in determining whether he remains the golden boy of the Conservative Party that holds his political fate in its hands.

“The big strategic question for Rishi is: ‘who is he?’” one “blue wall” MP tells HuffPost UK.

“Because lots of people project a lot of stuff on him and that’s fine to get you there – but at some point you have to decide what you are or you don’t achieve stuff.”

Sunak’s friend and Tory MP Kevin Hollinrake believes the chancellor will be unfazed by the challenge ahead, and won’t be worrying about his personal ambitions.

“Of course he’s going to have to come back and take tough decisions but that’s what politics is all about – to govern is to choose,” Hollinrake says.

“And he feels that very strongly, he feels that you can’t just hospital pass to the next person, you have got to do the right thing.

“He won’t shirk the challenge even if it does make him less popular.”

Mistakes

Photo by Stefan Rousseau / POOL / AFP

Sunak hosts a roundtable meeting for business representatives at a branch of the Franco Manca chain pizza restaurant in October

This time last year Sunak was a couple of weeks into the job of being chancellor and on the cusp of delivering a Budget that would become out of date within days, as the UK was plunged into lockdown.

His initial response, a £330bn plan with the furlough scheme as its centrepiece, made Sunak an instant political star, seen as calm and competent in No.11, in contrast to his at-times chaotic neighbour Boris Johnson.

The chancellor rode the wave of approval ratings of around +40 and, during the mirage of the semi-normal summer, he achieved what all politicians dream of – genuine cut through with the public.

His Eat Out To Help Out scheme saw diners flock to restaurants in their millions in the height of summer in August, praising “dishy Rishi” as they paid for their half price meals.

But the scheme unravelled in the months that followed, with studies suggesting it contributed to a rise in infections, while only having a “limited effect” on the embattled hospitality industry.

There have been more errors – Sunak reportedly fought the hardest among the Cabinet to reject the Scientific Advisory Group for Emergencies (Sage)’s recommendation of a September circuit breaker lockdown.

And he also managed to anger MPs in the “blue wall” of seats the Tories took from Labour in 2019 by initially resisting demands to maintain the £20 uplift in Universal Credit (UC) beyond March, a position that looks unsustainable going into Wednesday’s Budget.

Tory MP Sir Geoffrey Clifton-Brown, treasurer of the backbench 1922 Committee, sums up the UC error: “You’re using up political capital for no reason for something you’re obviously going to have to do (extend the uplift).

“You should only announce something like that unless you are pretty sure you are going to make it stick.

“He was never going to make that stick, there are too many people particularly in those ‘blue wall’ seats that were very unhappy about that.”

Most Tory MPs forgive or even maintain support for Sunak’s Eat Out To Help Out scheme and lockdown scepticism.

“If you’re looking at it from a party management perspective, he’s played a bit of a blinder because he’s not pissed off the mushy Lib Dems in the party and he’s shown a bit of ankle to those who think we should have been going quicker,” the “blue wall” Tory says.

But the public have been less forgiving, with his approval rating halving from its summer high to around +20. That, however, still puts him way ahead of any other Westminster politician.

A Tory insider says: “It’s still net positive because he’s not a dislikable individual and you feel that the decisions he makes are based on a balanced judgment of the facts that are in front of him.

“So you can argue that he didn’t do it right but I don’t think anyone could say he was doing it for anything other than trying to do the right thing by his responsibilities.

“Boris had that boosterism, optimism, not wanting to deliver bad news, you could easily read that from what Boris was trying to do.

“But I don’t think you could say that with Rishi – that he’s doing this for an ideological reason.” 

‘Moment of danger’

Photo by Jeff Overs/BBC News & Current Affairs via Getty Images

Chancellor Rishi Sunak will deliver the Budget on Wednesday

So Sunak, despite some errors, has ended his first year as chancellor as the most popular politician in Westminster.

But the “moment of danger” is approaching, according to Tory MPs who are braced for huge job losses in the months ahead.

Several want to see him use Wednesday’s Budget to set out a financial road map to recovery to accompany Johnson’s own plan to lift lockdown.

However, there are fears that Sunak will issue little more than a “holding statement”, with more pandemic-linked spending and a signal of future tax rises as a means of reducing the deficit, according to one Tory source.

“If you were spending as much as he’s been spending and you weren’t popular, it would be quite extraordinary,” they say.

“He’s still a fairly unknown quantity

“The actual difficult stuff is still to come.

“I’ve not really seen anything from him beyond writing massive cheques so far. 

“Where is his vision for growth?

“At the moment it just seems like he is only interested in deficit reduction.”

A 2019 intake MP says: “The next 18 months are going to be horrific for the country economically and it’s going to be horrific for the Conservative Party.

“We are going to take a lot of brickbats, I don’t think people appreciate how bad the economy is.

“The Budget needs to have a plan to get us through that.”

Clifton-Brown agrees: “It’s very easy to be popular when you’re handing out money and the problem is we’ve been handing out so much that we’ll be paying it back for a long time to come.

“The economy can’t keep bailing people and businesses out once the lockdown is over.

“That’s the real moment of danger, when you have to stop furlough and businesses have to really think whether they want to take all those people back on their books.

“I think we will see some fairly horrific unemployment figures in the autumn.”

The 2019 MP hopes Sunak can maintain his own and the government’s popularity by making the case for balancing the books while imposing tax rises.

They went on: “It’s going to be a rocky 18 months for everyone and for the Conservative government because people won’t like things, but it’s necessary medicine.

“If you look at austerity in 2010, people understood it even if they didn’t agree to the extent of it.”

But unlike in 2010, when Labour allowed David Cameron and George Osborne to define the deficit reduction argument, Keir Starmer’s party is taking it on this time by arguing that tax rises will choke off the Covid recovery.

They also believe Sunak will attempt to chart a kind of cake-and-eat-it approach which seeks to balance the books while allowing the government to claim it is ploughing ahead with its high-spending levelling up agenda.

A senior Labour source says: “He wants to go back to the outdated and tired debate of: how quickly can you cut or raise revenue – treating the economy like a household budget.

“And while we’re not going to necessarily actively have a war on that, it’s about framing the fact that he will try and do it in a way he’s not admitting.

“It won’t be the same as 2010-15, they will try and spin it in a way that makes them look in the red wall like they are keeping to their levelling up agenda, it won’t be a living within our means type message.

“But this is about exposing it for what it is and taking some of that sheen away from him.”

 

PR blitz

Perhaps wary that he will have to deliver bad news soon, Sunak is planning a PR blitz around this week’s Budget.

For the first time ever, the chancellor will host an evening press conference on Budget, giving journalists and MPs only around four hours to find the hidden nasties in the red book that sometimes take days to emerge.

He will also appear on the Martin Lewis Money Show on Thursday.

And he has rolled the pitch for the statement to come with a glossy six-minute video which sparked accusations of “vanity”.

Tories however welcome Sunak’s ability to communicate, believing it has been crucial in maintaining the government’s economic reputation amid chaos elsewhere in government.

“It will have a shelf life,” the “blue wall” Tory says.

“But his ability to package policies and sell them is a real asset given some of the clusterfucks we’ve had in the last year.

“The washing powder he is selling is pretty popular, so he’s had a bit of a head start there, but his ability to sell it is positive and one of the reasons why he’s so senior.

“But he will have to make sure the formula doesn’t become stale.”

Charm offensive

Photo by Tayfun Salci/Anadolu Agency via Getty Images

Sunak is still seen as the frontrunner to replace Johnson when the time comes

The media blitz also comes after a months-long charm offensive of Tory backbenchers which Sunak will hope helps maintain his status as Johnson’s most likely successor as he makes the tough calls.

The chancellor has been peeling backbenchers off into groups of five MPs, put together if they share similar ideas, for hour-long meetings.

“We submit in advance our ideas for the Budget, and it can be everything from what we want to do with the high street to particular tax rises or cuts, and then we have an open and frank discussion,” one says.

“He gives a decent length of time, makes sure our voice is heard and listens.

“He’s done an amazing job with that and he’s done it for the last few months.”

It’s an approach which has left some wondering if Sunak could mimic the non-ideological pragmatism of the Blair years, of being “all things to all people” as the ex-PM once said, or whether he will eventually have to stop being “everybody’s friend”.

The “blue wall” Tory says: “He’s got two challenges – he’s going to have to stop splurging the cash at some point so he will have to take some difficult decisions which will demonstrate how politically adept he is at that – I think he will do better than some people fear.

“But underneath he will have to decide what his ideology is.

“I think he probably knows it, but he has sort of nodded to everybody, so the question is: where does he actually stand on this stuff in the long-term?”

They went on: “I think people would naturally say he’s like them because he’s so nice and so adept at the politics that he’s everybody’s friend – everybody thinks he thinks like them.

“But I don’t know.

“Maybe he doesn’t have to decide, Blair never properly decided but he created a lot of political capital he didn’t use up.

“At some point he will have to put a marker down.” 

The 2019 Tory agrees: “Everyone appreciates what he has done in the pandemic and the way he’s dealt with things.

“But we now need to see what his grand plan is.From private conversations – he’s a proper low tax conservative, freedom of private enterprise.

“But let’s just see that in legislation. Let’s get the economy pumped up and going.”




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