28 October 2020

The greatest danger to Rishi Sunak comes not from his enemies but from his allies

This month, for the first time in his career, the Chancellor has had to experience, if not mortality, then at least retreat.

By Stephen Bush

On the evening of 8 July, a triumphant Rishi Sunak was greeted by an enthralled parliamentary party. The Chancellor had that day, to a rapturous audience in the House of Commons, unveiled a stamp duty tax cut and the “Eat Out To Help Out” scheme to encourage people back into restaurants. Equally importantly, as far as many Conservative MPs were concerned, he had won a decisive victory in the cabinet over the lockdown devotees. This would lead to an easing of restrictions and, with it, an end to the generous economic support package he had unveiled for businesses and households just a few months before.

Desmond Swayne, the Conservative veteran – who, as David Cameron’s parliamentary private secretary, delighted the then leader with his witty asides about one Conservative faction or another – came close to a note of menace, when he jokingly told Sunak: “Remember, O Caesar, you are mortal.”

Sunak is one of a generation of Conservative politicians who has known only advance. He was on the safe-seat circuit when Cameron was carrying all before him, and came into parliament in 2015 in the same election that the Conservatives ended their 18-year wait for a parliamentary majority. He was an uncelebrated but quietly appreciated campaigner for Brexit, and also a rising star under Theresa May. Plus, Sunak had an integral role in the 2019 general election campaign, and in the winter of 2020 became chancellor at the age of 39.

Three months later, for the first time in his short but impressive career, Sunak has had to experience if not mortality, then at least retreat. On 22 October, he was forced to make a U-turn after he had sought to restrict the flow of further subsidies to businesses in tier three areas in England (where the strictest rules on social contact are in place to curb the spread of Covid-19). More than this, Sunak was forced to extend both grants and wage support to businesses in tier two areas.

Under pressure from Andy Burnham, the mayor of Greater Manchester, Sunak was also made to backdate the support measures, at further cost to the Treasury. All were actions long advocated by Sunak’s opposite number, Labour’s Anneliese Dodds.

As politicians often do when they are about to U-turn, Sunak argued that he was changing his policy to reflect changed circumstances. But the circumstances remain unchanged: without a widely available vaccine, the only reliable way to curb the spread of Covid-19 infections is through a lockdown. But lockdowns come at an economic cost for households and for businesses, which are prevented from trading as before. Around the world, countries are divided between those that have eschewed lockdowns – and with them the large subsidies to businesses and households to make such measures survivable – and those that have chosen, and paid for, lockdowns.

In recent days, Sunak has been blamed for another painful political row, this time over the extension of free school meals to cover the half-term and Christmas holidays. The Department for Education, under Gavin Williamson, insists that the Treasury refused to make the additional money available. The Treasury insists that no such request for support was ever forthcoming. (This is a denial that, it should be noted, isn’t quite the same as suggesting that the money would have been granted had the Education Secretary put in a request.)

Notwithstanding the free school meals dispute, Sunak is deeply concerned about the increase in government spending during the pandemic and has made it his project, for several months now, to curb and reduce the schemes he announced during its earliest stages. The numerous loopholes that allow businesses to remain open even in tier three areas – which are mocked at Westminster – are not the result of oversight or confusion by the Chancellor and his officials. They are a conscious attempt to facilitate by the back door what Sunak has thus far failed to do in cabinet: to shift the government’s coronavirus strategy away from one of lockdown to one of adaptation.

For Labour, that represents its best line of attack against the Chancellor. Although Sunak’s popularity has declined from its springtime heights, he remains the country’s most popular politician and the most popular member of the government.

The Conservatives continue to enjoy, as they have since the financial crisis, a healthy lead in the polls on economic policy. There is no path back to office for Labour that doesn’t run through changing perceptions about the party’s economic competence, and also about Sunak. Labour’s preferred strategy is to highlight that the Chancellor, time and again, proposes policies that are some way short of what is required to support businesses and households in lockdown; that, in effect, he is the architect of all that makes the pandemic economically, as well as socially, painful.

The reality is more complex: Sunak’s great defeat came not last week but last month, when the government abruptly threw its loosening of restrictions into reverse. That such an easing would result in an increase in cases was predictable, and so were the pressures on businesses arising from a second lockdown.

In both cases, the real problem is not the Chancellor but a Prime Minister whose mode of operation is to pander to which-ever voice is currently shouting the loudest: in the summer, that meant reopening; in the autumn, trying to lock down and cut costs at the same time.

Like Caesar before him, Rishi Sunak’s greatest threat comes not from his enemies outside but from his flaky and easily panicked allies, who lack the conviction to overrule him or the courage to back him.