Of course politicians smile but at times it seems Rishi Sunak and Jeremy Hunt are, amid the UK’s cost-of-living crisis and economic malaise, just a bit too much like the Cheshire Cat.
This resemblance is, it must be emphasised, confined to the Cheshire Cat’s grinning. It would most certainly not extend to the enigmatic feline’s role, in the minds of some experts, as a guiding spirit for Alice during her time in Wonderland.
The economic leadership skills of Messrs Sunak and Hunt seem to be conspicuous by their absence. And the pair certainly do not evoke a feeling of wonder, at least not in any positive sense.
It has been interesting in recent weeks to see the pressure being ramped up on Mr Sunak and Co. for their failure to come up with anything even resembling a growth plan.
Major figures in the world of business and economics have weighed in on this front.
This pressure is entirely justified. It was clear from the moment that Mr Hunt was wheeled out by the Tories to supposedly steady the ship – after predecessor Kwasi Kwarteng triggered a financial markets crisis with his mini-Budget last September – that growth was likely to be a victim.
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Mr Hunt was part of the David Cameron-George Osborne administration that choked off growth so spectacularly from 2010 onwards with pitiless and savage austerity.
And when Mr Hunt became Chancellor last autumn, it seemed clear from his policy measures that he viewed this austerity as some kind of success to be repeated, when in fact it was an abject failure.
He seemed particularly pleased with himself when circumstance propelled him from relative political obscurity back into the limelight and on to the breakfast television settees.
We have since from the Chancellor had the implementation of an excruciating squeeze on public spending. And we have seen him go back on the Conservatives’ previous two-year promise of support for household energy costs, from erstwhile prime minister Liz Truss and Mr Kwarteng, which would have held the annual bill for a typical dual fuel household at around £2,500. This backing is now only in place until the spring, when it will be replaced by inferior support likely to see the typical annual bill jump even further from the current exorbitant level to £3,000.
And it remains impossible to fathom where Mr Sunak and Mr Hunt think UK economic growth is going to come from, and difficult to ascertain whether they even care about expansion. Not for the first time, the Tory economic plan looks to be based on how someone with miserly tendencies might run household finances.
There is no sense of a recognition that putting money into people’s pockets or major increases in capital expenditure could boost growth, lift tax revenues and thus actually produce a net benefit for the public finances. These are the same public finances over which the Tories obsess yet manage so poorly.
UK public sector net debt surged from around £1 trillion when the Tories came to power in 2010 to £1.8 trillion just ahead of the coronavirus pandemic.
John Allan, chairman of supermarket giant Tesco and housebuilder Barratt Developments, told BBC Radio 4’s Today programme on Friday: “The reality is that many, many people in this country are suffering through this cost-of-living crisis. It impacts some much more than others – it’s not even in the impact it has.”
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Asked whether tax cuts would help growth, Mr Allan replied: “Much more important I think for the UK and what we’d love to see from government is a really serious, thought-through, long-term growth plan because long-term growth is the only way in which we are actually going to be able to raise standards of living for our fellow citizens, and that’s the important thing and I think that’s something that it behoves both our major political parties to get on with and produce so that, when we get towards the election, the electorate can decide whose plan they like best but at least they’ve got two plans to choose from.”
Mr Allan added: “I am an optimist in the long term but in the short term I think we have some issues, and those issues are having an impact on investment.”
Former Bank of England chief economist Andy Haldane meanwhile highlighted the absence of a growth plan from Mr Sunak earlier this month.
Mr Haldane told the BBC’s Sunday With Laura Kuenssberg programme: “As things stand, it’s not really a growth programme at all – we’re currently short that piece of the jigsaw puzzle, which is, ‘What is the plan that’s going to boost growth over the medium term, enable pay to pick up, allow public services to be paid for and financed properly, the debt to be paid down?’. We’re still missing that.”
Asked whether the Conservatives had any choice over policy, Mr Haldane replied: “This is the year where optimism and innovation and investment will only happen if people have some sense of a brighter tomorrow for the economy. That’s the main reason why businesses are holding back on investing right now. That’s why the plan really matters – put in place today with expectations for improvement tomorrow.”
It remains easy to see how the Conservatives have been bearing down on growth not just in recent times but since 2010. This seems like an ideological instinct for them and one they cannot overcome, even if they had some kind of desire to do so (and it is far from clear that they do).
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At the current juncture, it sadly seems Mr Sunak, Mr Hunt et al would prefer to embrace misery wholeheartedly, rather than fight it. Of course, in contrast to the situation for misers, the suffering from Tory Cabinet ministers’ austerity is not felt by themselves but by millions of others.
However, even if they are unmoved by this sorry fact, you might have hoped they would have realised the misery they are creating will hamper significantly further a UK economy already projected to be the weakest performer among the Group of Seven leading industrialised nations this year. Sadly, it seems clear there has been no such dawning of reality, and they appear content to grin their way through what are for millions of households some very difficult times.
