The Chancellor woke this morning to a grim set of headlines as the newspapers chew over his spring statement. Despite dangling the carrot of an income tax cut by 2024, most papers focus on the OBR’s projection that inflation will lead to the biggest fall in living standards since records began in the 1950s. While left-leaning papers such as the Guardian accuse Sunak of forgetting the poorest in society, the papers on the right aren’t that much better for him. The Express asks about the ‘forgotten millions’, while the Telegraph roundly criticises his economic package. The Daily Mail has run with a slightly more welcome tone for Sunak but ultimately calls for more tax cuts to ease the cost of living crisis.
Sunak’s broadcast round, too, hasn’t exactly gone to plan either. As well as being asked about his wife’s reported stake in a company that operates in Russia, Sunak has come up against the Resolution Foundation’s overnight analysis that says 1.3 million Brits – including 500,000 children – are expected to be pulled into poverty next year despite Sunak’s spring statement. There is particular concern building about a real-terms cut to benefits: they are due to rise next month but only by 3.1 per cent, well below inflation.
To top it all off, Boris Johnson appears to be adopting a different line to Sunak’s comments that he cannot fix all cost of living problems. In a LBC interview, the Prime Minister acknowledged that the government will ‘need to do more’ in order to fix the crisis.
So, where does this all lead Sunak? Among all the criticism, it is worth noting that even those calling the spring statement underwhelming acknowledge that the fiscal situation the Chancellor finds himself in is difficult: he has very limited options given the billions already spent servicing the UK’s debt. Sunak has made it very clear he has no appetite now for greater public spending and believes tax cuts should be prioritised.
In the meeting of the 1922 committee of Tory MPs on Wednesday, the reaction wasn’t so hostile – some praised Sunak over income tax and one MP went so far as to compliment him for a ‘creative and conservative’ spring statement. But it’s likely that the media reaction will start to spook some MPs on the fence. The biggest critic in the session was John Redwood who called for greater tax cuts.
Politically, the Tories are going to come under a lot of pressure to do more. There was already a sense Sunak would need to offer more in the autumn Budget (something he himself appears to have acknowledged) when it comes to energy bills. From the reaction so far, it’s clear that pressure is growing for him to go further.
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