David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.
The Prime Minister has decided that there is only one political strategy that can work in delivering a general election victory. The country wants change and he is going to deliver it. We can assume that the theme of change will be prominent in the presentation of the King’s Speech tomorrow, just as it was for Rishi Sunak’s speech at the Conservative Party conference a month ago.
It did not work then (Labour clearly won the party conference season) and probably won’t work now for several reasons. It is hard to be the party of change when you have been in office for 13 years. Nor is Sunak a natural insurgent or a “man of the people” who can present himself as a break from the establishment. There is little he can do about those first points but if he wanted to make the case for being a figure of change, he needed to be bold in distancing himself from his two immediate predecessors. He has not done so.
Two specific incidents have done the most damage to the Conservative cause – partygate and the Truss/Kwarteng mini-budget. Sunak was very unfortunate to be embroiled in the former (he turned up on time for a meeting and got a fixed penalty notice for his troubles), but no one can believe that Downing Street would have had a rule-breaking culture under his watch. He spent his entire leadership campaign of 2022 warning about the consequences of Liz Truss’s fiscal policy. He is entitled to contrast his own behaviour and values with those of Johnson and Truss, yet the fact that he does not so shows the difficulties the Conservative Party faces.
There is no doubt what Sunak thinks in private about Johnson’s honesty and competence as Prime Minister. It is broadly the same as what most of the country thinks; a view that is only confirmed by every piece of evidence presented to the Covid inquiry. And yet he pulls his punches. The reason is that he perceives that there remains a minority of the public, particularly prevalent in the Red Wall, who still admires Johnson. Criticising him, Sunak fears, will only antagonise them.
A similar point applies to Truss and her fiscal policies. She has less of a following in the wider public but Conservative MPs report that many of their members think that Truss is right about tax cuts. There is a line of attack available to Sunak that links Truss’s unfunded tax cuts with Labour’s unfunded spending commitments on the Green Prosperity Plan but, again, the Prime Minister has been reluctant to make it. He should do so quickly before Rachel Reeves eliminates this opportunity.
That Sunak, determined to run as a change candidate, will not make the best arguments for change available to him undermines his strategy. For all the arguments about party management and holding together the Tory coalition of support, at some point the Conservative Party is going to have to come to terms with Johnson’s unsuitability for high office and Truss’s economic recklessness. If Sunak is not willing to do it while in office, one of his successors will have to do it in opposition.
This leaves the Sunak change argument somewhat threadbare. In that context, we have had speculation that the Prime Minister is going to change personnel. In particular, it has been rumoured that his Chancellor, Jeremy Hunt, will be replaced before the next election. He has, after all, been a Cabinet Minister for all but three of the last 13 years and embodies continuity, not change.
Of course, it is possible that Hunt will decide not to stand at the next election (he will be defending Godalming and Ash, which is by no means safe). If that is his intention, it would make sense to have a new Chancellor in place. But if, as Hunt maintains, he intends to fight the election, it would be a mistake.
By and large, Chancellors should not be changed frequently. Not that long ago, a mid-Parliament change of Chancellor occurred only if there was a new Prime Minister (1990, 2007, 2016), the aftermath of a dramatic economic policy failure (1967, 1993), or death (Iain Macleod in 1970). When a Chancellor resigned because of a fundamental difference of opinion between the him and the Prime Minister in 1989, Nigel Lawson’s departure signalled the beginning of the end for Margaret Thatcher. Chancellors generally had the chance to master their brief, plan and provide some stability. The markets, at least, found that reassuring. Over a 26 year period from 1993 to 2019, we had just five Chancellors; if Hunt goes before the election we will be on to our sixth – and probably, with Reeves – our seventh Chancellor over a five year period.
Some of the agitation with Hunt is that he is not seen as being sufficiently political, which is often code for being reluctant to cut taxes. I have no doubt that he would be delighted to cut taxes but, as the Institute for Fiscal Studies pointed out in their Green Budget last month, he is very unlikely to have the fiscal headroom to do so.
Furthermore, any tax cuts at this point are likely to make the Bank of England’s task harder in bringing down inflation. A looser fiscal policy would result in higher interest rates which, in turn, would worsen the fiscal situation as debt interest payments went up. Nor should we be complacent that a return to fiscally irresponsible policies would not also see a return to the market turmoil of last year.
In other words, a change in Chancellor would not result in a fundamental change of economic policy. There is still, of course, the argument that a new face would help embody change. Who would that be? One name mentioned is Mel Stride, who would probably have been Sunak’s first choice had he beaten Truss in 2022. Stride is a very good man – sensible, mature, thoughtful, affable, and respected in the Treasury. The more prominent a role Stride plays in the future of the Conservative Party, the better. But, notwithstanding that he might not be that familiar to the wider electorate, his appointment would not be seen as a radical break from the past.
The other name increasingly mentioned is Claire Coutinho, who would be a new and unfamiliar face to the public. She is clearly impressive but has only been an MP since 2019 and the appointment of someone so inexperienced to so big a role comes with risks. Particularly if she was only appointed after a March budget, she would have little time to make a positive impression. And, by the way, whoever briefed that at least this would deprive Reeves of being the first female Chancellor was doing Coutinho no favours. The electorate does not care about such matters and it just makes the Conservatives look petty.
The country does want change but Sunak should demonstrate that he is represents a change from the moral laxity associated with Johnson and partygate and the fiscal irresponsibility of the Truss era. Sacking Hunt (someone associated with neither episode) would be a mistake.