Emily Carver is a writer and broadcaster.
It’s been a difficult week for the Prime Minister. Amidst the fallout from the Rwanda vote and turmoil within the Conservative Party over immigration, the former Chancellor must also grapple with this week’s economic news.
And it makes for grim reading. The UK economy contracted faster than expected in October, shrinking by 0.3 per cent – sparking concerns that we could be teetering on the brink of recession.
Now, of course, we are not alone in experiencing a lack of economic growth. As Julian Jessop has pointed out, the UK’s economic performance is still comparatively better than some key European countries; Germany, France and Denmark have all experienced contractions.
But poor growth in the eurozone is no cause for celebration – and neither does it distract from the fact that Rishi Sunak has asked us to judge him on growing the economy.
Instead, we’ve seen the economy move in the wrong direction, hovering around zero for months, before this surprise downturn.
Yes, immigration continues to poll very highly with the electorate as an issue of concern, and rightly so, but the economy is still number one – and the Government is yet to deliver the supply side reforms that could give it the much-needed boost it needs.
Poll after poll shows how concerned voters are about the economy. This week, when asked by YouGov, 56 per cent said that the economy is the most important issue facing the country, before health and immigration.
But if the next election comes down to whether people feel better off come the next election, as it stands, the Conservatives will get an absolute walloping. Even on immigration, the Labour Party is currently more trusted.
Now, the Government has stuck to its mantra that the priority is to bring inflation down and, thankfully, the headline rate has halved since the Prime Minister made his pledge. However, rising prices remain far more stubborn here than elsewhere in Europe, including in the eurozone, where the annual inflation rate was 3.9 per cent in October 2023, compared with 4.6 per cent in this country.
Of course, Jeremy Hunt has done his best to spin the growth data positively, commenting that it was “inevitable” that economic growth would be subdued while interest rates were being raised to tackle inflation. He also pointed to the reductions in business taxation that will be coming our way following last month’s Autumn statement.
But so long as people feel worse off, Sunak and the Conservatives will continue to poll terribly. Indeed, despite the welcome attention on record levels of legal and illegal immigration (though it remains to be seen if their efforts will bear any fruit), 70 per cent of people have an unfavourable opinion of the Prime Minster.
It’s hardly surprising really that the public are fed up with the Conservative leadership while inflation continues to bite and eat into living standards.
But, what I can’t quite understand is why the Government doesn’t shift to an economic war footing. After all, the clock is ticking before the next election, why not throw the kitchen sink at trying to boost growth?
Sure, after the chaos of the Truss administration, it’s understandable that Sunak and Hunt would favour a more cautious approach. But a couple of tax cuts here and there simply won’t cut it. What we need is a bold strategy – and that means wide-ranging supply-side reform.
For example, where is the logic in slashing housebuilding targets for the greenbelt, when we’re receiving record levels of immigration?
Where’s the sense in allowing the UK to suffer the highest tax burden on record, when the economy is flatlining?
What’s the point in feeding division within your Party and the rest of us over a Rwanda deportation scheme that only one per cent of the public believe will be successful in stopping the boats, when you’re failing to take the regulatory decisions to cut the cost of living?
With an election likely a year or so away, Rishi Sunak’s popularity is lower than ever, and the Conservatives are polling consistently 20 points below the Labour Party. They could, at the very least, go for growth.