Rishi Sunak is the heir to Blair – his mini-Budget will bear the marks of New Labour’s legacy
In his spring statement tomorrow, the chancellor will defend a tax rise for the NHS while trying to help those on lower incomes with fuel bills, writes John Rentoul
If you close your eyes, Rishi Sunak even sounds like Tony Blair. The same unplaceable posh accent; hyper-articulate; utterly reasonable. The chancellor talks fast and yet with precision. He gave two TV interviews at the weekend to pave the way for his mini-Budget tomorrow – and for students of the next prime minister, they were worth watching.
If you watched one of them, you might have noticed the Blair parallel. If you watched both of them, you will have been struck by something else. The two interviews were nearly identical. Not only were the interviewers called Sophie R and Sophy R (Raworth for the BBC; Ridge for Sky News), but many of Sunak’s answers were word-for-word the same, yet completely natural in context. This is message discipline of an ultra-Blairite kind.
The ability to give the same answer several times is, of course, a mere mechanical skill, although most politicians struggle to master it; what makes Sunak even more Blair-like, though, is that he knows his stuff. If challenged on a perfectly formed paragraph of persuasive argument, the chancellor has total command of the steps in the thinking that got him there, and the facts on which it is based.
He was asked by both Sophies about the failure of defence spending to keep up with inflation, and in both cases got into an intricate dispute about the period over which the promise to maintain spending in real terms would apply. But then he was able to turn the interviews to the bigger questions of public spending and taxation, in effect to say: “I can’t spend ever greater sums of public money on everything.”
He was already under pressure in different parts of the interviews to explain why he was pressing ahead with the decision to raise taxes. On this, he was unapologetic and clear. “We’re putting in place a new NHS and social care levy because we care about the NHS,” he told Raworth. “What I’d say to people is I know it’s difficult, but you can be reassured that every penny you pay of this levy, unlike any other tax, goes directly to the thing that you care most about, which is the NHS.”
Thus he navigated the third way, between those complaining that he wasn’t spending enough on defence at a time of war in Europe, and those complaining about taxes going up. The tax rise is the harder case to make, with Labour uniting with Conservative backbenchers to demand that it be postponed. Labour is being opportunist, and the self-styled Thatcherites among Tory MPs are being economically implausible, unsure whether they are calling for more borrowing or for a return to “austerity”. But because the alternatives are worse, Sunak has a strong line in bipartisan reasonableness, which he defended robustly.
Ridge showed a chart of chancellors through the ages, going back to Anthony Barber in the 1970s, and how much they had raised or cut taxes overall. Sunak currently shares with Gordon Brown the prize for having increased taxes the most: in Brown’s case over 10 years, in Sunak’s over two. Sunak responded sharply: “Which one of them had a pandemic to deal with?”
He has a Blairite facility for taking a position that has been thought through and defending it against attacks that seem superficially plausible but dissolve on contact. The idea that taxes should not rise in the wake of having borrowed £400bn to preserve jobs during the pandemic is hard to sustain: it requires either huge additional borrowing or deep cuts in public spending, neither of which anyone is prepared to defend in detail.
That remains essentially true even as the economic situation changes. Sunak has come under pressure to do more about rising energy prices in tomorrow’s spring statement, at a time when higher tax revenues than expected give him some scope to do it. The questions are how much help he should offer, and how targeted it should be towards those on lower incomes.
Interestingly, advice has been offered by, in addition to all the usual sources, Tony Blair himself. His institute published a short paper yesterday setting out some options for softening the blow of rises in the cost of living. The institute’s main proposal is to increase benefits by the current rate of inflation instead of the rate seven months ago, which would by definition protect the poorest – except that the prices of the goods they spend a greater share of their income on (mostly energy bills) are rising faster than average. Thus the institute also suggests reinstating half of the £20-a-week uplift to universal credit, and extending it to other out-of-work benefits.
The paper is a good example of how Blair’s institute is increasingly finding a role as a kind of guerrilla operation, launching New Labour policy strikes designed to reinforce the grip of Blairite thinking on both main parties.
The other intriguing thing about Sunak’s two interviews on Sunday was the extent to which he stuck to the Blairite middle ground: the priority is the NHS, paid for by “fair” taxation, with “targeted support” for fuel bills “to those on lower incomes”. This emphasis on fairness and social justice is what ran through Sunak’s rhetoric during the pandemic. We shouldn’t overlook how much he and Boris Johnson mark a return to Blair’s legacy.
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