Sunakonomics

This week we discuss the government's post-Budget economic strategy and the new dividing lines in British politics. Have the Tories stolen Labour's clothes? Is there a new consensus emerging on tax and pend? What can Keir Starmer do to carve out a distinctive economic position? Plus we consider whether a new Labour leader in Scotland can kickstart a revival of the party's fortunes there. With Helen Thompson and Chris Brooke.

Talking Points:

Rishi Sunak’s plan in the short-term is to concentrate on economic recovery and to end pandemic support in a reasonably—but not entirely—gradualist fashion.

• In the medium-term, he’s saying there has to be an emphasis on paying for the pandemic and bringing the level of debt as proportion of GDP back down.
• Sunak wants the Conservatives to go into the next election as the party that claims to be serious about the economy, ie, cautious about debt.
• Both of the parties seem to be hoping that the past will come back—but it probably won’t.

Starmer put a heavy bet on the competence case against Johnson.

• That worked well for much of 2020. The bet was that Brexit would make things chaotic.
• But the pandemic has gone on longer than people expected, and the vaccine rollout is going well. The furlough scheme has also been continued.

In two-party politics, the two parties often tend to converge. Is this happening in the UK?

• Both parties have an interest in constructing the convergence as an illusion; but is it?
• Brexit has produced some convergence because Labour isn’t trying to rejoin Europe.
• Financial and monetary market conditions make it possible to sustain huge levels of debt.
• Most of the Western world have responded to China’s industrial strategy by calling for an industrial strategy.
• The Tories are now putting a big emphasis on green energy; this also brings them closer to Labour.

The politics for each party are different.

• Labour needs to persuade people it has a plausible growth strategy because that is what they need to flourish.
• The big risk for the conservatives is unemployment.
• Labour needs to expand its electoral coalition; this won’t be easy, but the return of mass unemployment might provide one way of doing this.

Further Learning:

• More on Rishi Sunak’s budget
• Johnson’s green energy plans
• Why public debt is not like credit card debt
• On Starmer’s response to the budget
• Who is Anas Sarwar?

And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking

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