Week-in-Review: Right-wing clamor for tax cuts makes Sunak look vulnerable

There are few accusations more damning than “weakness” in politics. This familiar jibe has hung ominously on several ill-fated premierships – most notably that of John Major, who was branded “weak, weak, weak” by then-opposition leader Tony Blair. In 1997, this staggered defenestration clashed with the prevailing view among the public that the Conservatives were too consumed by the European question to pursue suitable government. As a result, Major’s Conservatives were defeated in the ’97 election.

In 2023, Labor leader Sir Keir Starmer is consciously echoing Blair’s famous line of attack, regularly berating Rishi Sunak as “weak”. The latest allegation came at PMQ on Wednesday as the prime minister struggled to explain Nadeem Zahavi’s continued presence in his top team. Sunak’s counter-criticism was that Starmer was the real weakness of British politics, citing his failure to criticize Jeremy Corbyn when he was a member of the shadow cabinet.

The weekly weak-off at PMQs suggests that it is currently the Zahawi story that is engulfing the government like an out-of-control fire. But as the scandals involving Home Secretary Suella Braverman and Deputy PM Dominic Raab suggest, the tussle over staff could prove volatile in the long view of British politics. Where Sunak is now, there is another persistent problem, potentially far more destructive to the prime minister and his party’s electoral prospects. I am referring, of course, to the inability of the Conservative Party to unite on fiscal policy.

Back in October, the terms of Sunak’s succession as prime minister were dictated by his party’s infamous fiscal fiasco. After spending a hedonistic long-summer flirting with Trusonomics, Sunak was brought into Number 10 to help restore Britain’s much-maligned “cell orthodoxy” and restore his party’s commitment to “sound” funding.

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Apparently, Sunak’s first decision as prime minister was to defer Jeremy Hunt’s “fiscal update” and expand its brief into a fuller autumn statement. This allowed Sunak to put markers in a thinly veiled message to the right wing of his party. The adults are back, read the subtext.

It can primarily be interpreted as a sign of strength. Sunak’s political calculations were what the public would assume he Can be trusted to tell the hard truth about the UK economy. Where it might be more politically expedient to reign in tax increases and be more cautious about spending cuts, Sunak will instead be seen as prioritizing sensitivities.

The swift, disjointed retreat of the Autumn Statement caused much political embarrassment for the conservatives on the right. By the time Hunt sat in the Commons on November 17, almost every principle of the Trust’s financial plan had been dropped. But while the new proposals drew some flak from ardent converts to trosonomics, there was no political capital left to spend. The proposals were grudgingly swallowed by the party, although some indicated they were saving their protests for a more politically expedient time.

That time seems to be now.

Since Autumn’s statement in November, proponents of transit tax-cutting ideals have not been nearly as quiet as Sunak first calculated. A number of key party figures, including former Conservative Party leader Ian Duncan Smith, are laying the groundwork for a new financial clash.

“We are suffocating ourselves”, the IDS said recently financial bar. “If you want to grow the economy, you have to reduce the tax burden on individuals and companies”. In a similar vein, Grundy John Redwood argued: “A tax cut is essential in the budget to help people. We’re overtaxing businesses and individuals”. Also joining the clamor for tax cuts were conservative-leaning newspapers, including Daily letter And The Daily Telegraph. The situation is becoming unstable.

Tax collectors of British politics, united!

In early January, around three dozen Conservative MPs united with Liz Truss’s tax-cutting agenda came together to form a new informal caucus: the “Conservative Growth Group”. Truss himself was present as MPs gathered in the office of Simon Clarke, the former leveling-up secretary and perennial rebel under Sunak. The creation of the group was the latest indication that Sunak’s party is keeping the flame of right-wing trosonomics alive.

For the prime minister, the debate over fiscal priorities now risks spilling over into a wider battle for the “soul” of his conservative party. After being crowned on a platform of revenue tightening by 120-or-so MPs, Sunak’s inability to bring the rest of his party with him could be interpreted as a sign of the fragility inherent in Number 10.

Allegations of weakness may also provide comfort to Sunak’s recent efforts to cut taxes in his party. Speaking at Engagement Leveling last week, Rishi Sunak confirmed: “I’m a conservative, I want to lower your taxes… I wish I could do it tomorrow”. Promising to strengthen the economy, Sunak added: “Trust me that’s what I’m going to do for you this year, that’s what we’re going to do when I’m prime minister and if we do them, we’ll be able to. Cut your taxes”.

In taking this line in Chancellor Jeremy Hunt’s speech on Friday, Sunak is essentially accepting the arguments of MPs on the right of his party. It sets up an extended political battle in the lead-up to 2024 because MPs don’t ask “willpower Will the tax be cut?” butwhen Will Sunak cut taxes?”

Given that the Prime Minister already has a reputation with her MPs on policies ranging from housing to online security, the political incentive is there for the Tory tax-cutters to start making noise. The threat is that the Conservative Growth Group, in the same vein as the European Research Group, could begin to push Sunac away from his government’s founding principles.

An internal battle over fiscal philosophy will also hijack Sunak’s plans to corner the Labor Party on the issue. As I said earlier, the Autumn Statement was strategically oriented to exploit perceived Conservative strength and traditional Labor weakness. But fiscal policy now appears to be a key issue for the Conservatives as Sunak’s own tax-and-spend strategy is called into question. Indeed, if many backbenchers made their complaints about the Spring Budget public in March, Hunt could hardly put a finger on Labour’s alleged fiscal irresponsibility.

“weak, weak, weak”

“Is it 1992 or 1997?”, is the question on everyone’s lips in Westminster. In other words, can Sunak emulate the John Major of 1992 and shock voters, or is he closer to the 1997 Major and careering into 2024? An answer remains elusive, but the past fortnight in British politics has held up several bad omens for the Conservative Party’s electoral prospects.

With accusations of sleaze and carelessness already a constant feature of the news cycle, the split over monetary policy now mirrors John Major’s war on the European question. Sunak has already found that there are enough rebels to threaten his majority on almost any issue, so don’t expect that to change as the stakes are high on the spring budget and tax cuts.

So do we expect Sunak to make meaningful progress in 2023 and beyond? Certainly, as the Prime Minister tries to do so, Blair’s dread triangle of “weak, weak, weak” will hang ominously over the proceedings. As the polls stand, Sir Keir Starmer continues, ’97-bound