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Good morning. Some more thoughts on the chancellor’s announcement, plus what Keir Starmer was up to in his pre-Budget PMQs.
Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb and please send gossip, thoughts and feedback to [email protected]
Cash to splash?
In terms of the things Jeremy Hunt can directly control, he made a number of smart moves, as I wrote in yesterday’s post-Budget briefing. Unfortunately, the things he can’t control look pretty bleak. Here are the Office for Budget Responsibility’s forecasts for household incomes:
Real incomes are forecast to fall to almost where they were a decade ago — and don’t forget the OBR’s overall growth forecasts are relatively optimistic compared with estimates by independent economists and the Bank of England.
This is a grim backdrop for pretty much everybody: British households most of all but of course it is also bad for the Conservatives’ political prospects. As Martin Wolf writes in his column:
He has produced a set of measures that should bring about some structural improvements. But the fundamental picture remains one of a cost of living crisis, a dysfunctional public sector, an unhappy public sector workforce and a less than dynamic economy. Will this Budget change all this? I doubt it. Will it win the next election? I doubt that, too.
One source of Conservative solace is this: because Hunt’s fiscal rule is over a rolling five-year period, he will gain extra headroom next year for election giveaways in the shape of tax cuts and/or spending rises. Chris Giles’s analysis is here.
That’s possible, but there is one big reason why I think it’s unlikely that the chancellor’s remaining headroom is going to make it to the next election intact: the things that Hunt chose not to do in this Budget. He did not raise defence spending to the level which defence secretary Ben Wallace and many Conservative MPs had wanted, he did not make more money available to resolve industrial disputes across the UK and did not increase the amount of money going into public services.
He faces internal Conservative party pressure to increase defence spending, electoral pressure to resolve the strikes taking place across the country, and faces both electoral pressure and internal party pressure to increase the amount of money going into public services.
Yes, most Tory MPs will tell you that they want the government to focus on tax cuts. But then many of them will, in the next breath, say that they would like the government to do more to support stay-at-home parents and not just see professional childcare as the solution to everyone. Or call for more policing, or yet more efforts to tackle small boats, or some other costly hobby horse.
If you consider the possibility that events — be it some kind of economic storm, some kind of crisis in a British university caused by that long period of real-terms cuts in the value of the tuition fees, something — again force the government to spend more money, I just don’t think it is particularly likely that Hunt’s headroom is going to make it to the next election.
That’s not to say that the Conservatives don’t have a way to win the next election: I just think if a victory comes it will be through the claim that “things are bad but improving, don’t risk Labour’s inexperience”, rather than a giveaway Budget.
Psst! Auntie, he’s talking to you
One of the few cast-iron certainties in British politics is that no opposition leader will ever, ever, ever make meaningful headlines in the prime minister’s questions before the Budget.
As a result, opposition leaders often use that PMQs to send a message to stakeholders. Perhaps they might address some kind of controversy that matters to an internal power broker but no one really cares about.
They might feel obliged to mention an ongoing international situation out of fear that they would otherwise look parochial, even though they have nothing to gain by making it the centrepiece of PMQs in a busy week. Whatever: the only interesting thing about the pre-Budget PMQs is that it is a window into which stakeholders the leader of the opposition is trying to talk to. So what can we surmise from Keir Starmer’s PMQs yesterday, when he opted to discuss the Gary Lineker affair?
This will have a message designed to speak to one particular group of stakeholders. In this case, the BBC’s senior management. This is smart politics: a reliable way to nudge the BBC’s coverage in your direction is to plant seeds of doubt about the corporation’s impartiality internally. After a week in which the BBC itself has done plenty to plant those seeds, it makes sense for Starmer to go on about it.
Starmer’s choice to highlight accusations of the “national broadcaster dancing to the government’s tune” in a week when the only thing other people are talking about is the Budget also means he avoids a fight with the large number of people in the Labour party who oppose any kind of critical engagement with the BBC. Keep an eye out for anything else Starmer might do to try to reinforce this message: it’s a good bet, I think, that he will do more of this sort of thing.
Now try this
I’m very much enjoying Transmissions from Total Refreshment Centre, (Mike Hobart’s review is here), an eclectic collection of some of the best new jazz.