I wonder what the Tories are going to do after the pandemic is over and all neatly tucked up in bed (a metaphor Johnson hasn’t used yet.) The Office for Budget responsibility has projected a deficit for 2020/21 of £394 billion, as opposed to the £55 billion the government originally planned. According to the Independent (25th November) ‘In October, the Chancellor vowed to “get our borrowing and debt back under control”, which the OBR has interpreted as a flat or falling debt-to-GDP ratio by the end of the spending period, in 2025-26. “Tax rises or spending cuts of between £21bn and £46 bn (between 0.8 and 1.8 per cent of GDP) would be required merely to stop debt rising relative to GDP,” its post-spending settlement report stated.’
So just to stand still could require one form of belt tightening or another, on a scale at least equivalent to the first round of Tory/LibDem austerity. Rishi Sunak has promised to get ‘the books into balance.’ That great intellect and economic genius Jacob Rees-Mogg has today ‘suggested the Conservatives risk losing the next general election if the chancellor flouts a manifesto pledge and increases taxes to deal with the economic crisis caused by the coronavirus pandemic. The leader of the House of Commons said now was not the time to “slap the economy down with higher taxes” as he warned against the political repercussions of breaking promises made to the electorate. His remarks follow Rishi Sunak’s failure to commit to maintaining the pledge displayed prominently on the second page of the Conservatives’ 2019 manifesto not to raise the rate of income tax, VAT or national insurance.’ (Independent, 7th Dec.)
This then is the post-Brexit, post-Covid battle that is looming in the ranks of the Tory party, one which is made more complicated by their new found love of the so-called ‘red wall’ seats and ‘levelling up.’ And no doubt there will soon be a dark cloud hanging over Sunak’s role as Johnson’s heir presumptive, the give away Chancellor who in one form or another is about to become the take away Chancellor. There are a number of ways the Tories could get themselves off this hook, one of which is simply to reconcile themselves to the fact that being in debt is a perfectly normal feature of being in government. Our current debt situation isn’t any worse than it was in the early 1960s (see chart below - n.b. the 2020 debt level has reached the 100 line). Then we had the swinging sixties and everybody was bright and cheerful. Now, I suspect we will be warmed up for another Tory austerity shitshow, a continuation of their holy mission to make the state smaller as we become the world’s leading exemplar of sovereign self-reliance, blah, blah, blah.
Naturally, one’s attention turns to how Labour will counter this forthcoming attack on public spending. I’m wondering if the party is looking that far ahead. After all, leader Starmer is still devoting a lot of his attention to fighting pointless internal battles.