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 budgetJohnson’s green energy plansWhy public debt is not like credit card debtOn Starmer’s response to the budgetWho is Anas Sarwar?

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