The Tories may need more than economic growth to change their fortunes

It was revealing that Jeremy Hunt was put forward by the government for the Sunday political shows on TV – unusually, only three weeks after his last Sunday media round on the eve of his Budget.

The chancellor’s latest appearance was a tacit admission that his package, including a two-percentage-point cut in national insurance contributions, has failed to move the political dial – to the frustration of the Conservative MPs who are starting to fear that nothing will dent Labour’s 20-point lead in the opinion polls.

True, Mr Hunt wanted the opportunity to bask in the brighter economic news since his Budget – a sharp drop in inflation and a return to limited economic growth which should soon bring the UK’s recession to an end. Ministers hope that wages outpacing inflation will generate a “feelgood factor”, and that the Bank of England will soon start to bring down interest rates so mortgage rates fall, undoing some of the damage from Liz Truss’s disastrous mini-Budget.

With Rishi Sunak’s flawed Rwanda policy still stuck on the runway, the economy offers the Tories their best shot of turning this year’s general election into a real contest, instead of an apparent shoo-in for Labour. The economic green shoots are welcome, allowing Mr Sunak to claim the UK has turned a proverbial corner. But it is far from clear that dry economic statistics will bring an improvement in the Tories’ fortunes.

Mr Hunt’s main purpose in his interviews on Sunday was to draw dividing lines with Labour ahead of the election. He was very keen to reply to last week’s 8,000-word Mais lecture by Rachel Reeves, the shadow chancellor. Perhaps this was a back-handed compliment that the opposition’s man-for-man marking of the government on economic policy has reassured voters that Labour can be trusted on it.

Mr Hunt insisted that the Tories would cut taxes if they won the election, while Labour would not. Naturally, he skated past the overall tax burden being at its highest for 70 years, again blaming this on the pandemic and energy price shock after Russia’s invasion of Ukraine. He argued the Tories would secure economic growth by “making work pay” for UK workers (possibly with tougher benefit sanctions to encourage the unemployed to take jobs) while Labour would rely on higher migration. The Tories will claim they will squeeze the rising welfare budget, claiming Labour would not.

For good measure, the chancellor confirmed that the triple lock – under which the state pension rises by wages, inflation or 2.5 per cent, whichever is highest – would remain for the next five-year parliament under the Tories, even though politicians of all shades know it is unsustainable.

Indeed, the missing piece in Mr Hunt’s prospectus was any vision of what an unprecedented fifth Tory term would mean for the country’s ailing public services. The chancellor made clear that, if he had any spare resources, he would prefer to use them to reduce taxes rather than safeguard services. The Tories owe the public an explanation of how they would implement the £20bn of cuts Mr Hunt has pencilled in for the next few years to make room for pre-election tax reductions. It is clear they intend to avoid the question. While the Tories are convinced their 2019 voters favour tax cuts, they would be foolish to ignore voters’ deep concern about the state of public services.

Regrettably, the chancellor suggested the government will play for time rather than announce compensation for the “Waspi women” born between 1950 and 1960, who have effectively lost a large proportion of their state pension. Perhaps he does not want the bill to show up in the government’s accounts before the second fiscal event he would like to squeeze in before an October election, as this would limit his room for further tax cuts.

Even though many voters would by then be tuning into politics as the election looms, the Tories’ problem is that there is no guarantee they will be in the mood to give the government much credit for an improving economy. To many people, it will look like Mr Sunak’s administration is clearing up the mess left behind by the Johnson and Truss governments. A mess, in other words, of the Tories’ own making.

Crucially, most people are unlikely to feel much better off by an autumn election. The current parliament is expected to be the first since records began in which living standards fall. Labour will understandably pose the question asked by Ronald Reagan, which proved critical in his winning the 1980 US presidential election: “Are you better off today than you were four years ago?” More than half of UK voters say they do not feel better off than at the 2019 election and even a third dose of tax cuts is unlikely to change that.

Mr Sunak’s prediction that 2024 will be “the year that the economy bounces back” might prove correct, but it looks unlikely to deliver a bounceback in the fortunes of the Tory party.