The circus is coming to town…

Money talks, but it don’t sing and dance, and it don’t walk,

We are due to have a UK general election sometime in the next 12 months. We know that, it’s the rule that we can’t go for longer than five years without the Westminster circus coming to town again. At the moment we seems to be entering the usual kind of ‘phoney war’, where we know one is coming, but we don’t know when. What we do know is that any firm plans made this side of an election could come a cropper when we get t’other side, depending on which party leader gets to don the ringmaster’s hat at the denouement. (Yes, that line is there simply to facilitate a picture of Hugh Jackman at the end, #sorrynotsorry.)

The last two elections, called by Prime Ministers May and Johnson were snap election, called by the Prime Ministers in 2017 and 2019 respectively in order to shore up their Brexit plans and strengthen their negotiating arms. One gamble paid off, the other didn’t.

Johnson’s gambit, the one that worked, brought the Tories a tonne of seats in previously solid-red Labour territories, the so-called blue-wash of the Red Wall. If Rishi Sunak has the proverbial cat in hell’s chance of staying in Number 10, he will need to keep those constituencies blue.

Whether the most recent government pronouncements will help him do so rather depends on why those seats turned blue in the first place. Were they swayed by the barn-storming rhetoric of Johnson, promising them sunlit hinterlands beyond the EU once he could Get Brexit Done? Were they swayed by the thought that, post-Brexit levels of immigration and illegal migration would fall, leaving jobs ready & waiting to be filled by the local population? Were they just switched off by the in-fighting  and antisemitism accusations in the Labour Party? Orby  the then leader Jeremy Corbyn’s steadfast belief in a magical money-tree. Did they believe that the Tories would be the party to reduce taxes, and get the economy back on track?

All this might go some way to explaining the Autumn Statement of a couple of weeks ago, which, like the breakfast of the poor old curate, contained some good parts, but was more of a mid-morning snack, than a full-blown hearty feast. Any Chancellor who might hope not to have to book the removals van for the day after the election knows they have to use the Statement to try and show Ordinary Working People – aka Voters – that they are front and centre of any fiscal plans going forward.

So, some good things. If you’re a manufacturer or merchant planning on replacing plant, machinery and vehicles, the extension of fully-expensed element of investment is welcome, and was something that the industry had been hoping for. Housebuilders might benefit from streamlining of the planning process I suppose, but the houses still need to sell once they are built, and there’s been a significant slowdown in the housing market – the repercussions of which are being felt across my LinkedIn feed – which isn’t helping matters at all.

Away from industry, the tinkering with National Insurance rates, the minimum wage and benefit levels will help some people feel that there’s a bit more change in their pockets, as will the commitment to the pension triple-lock, something there had been talk of binning. However, tax thresholds have been frozen since 2018,  dragging more people into higher tax bands, which the NI changes only partially mitigate.

At first glance, there’s something for most people to feel ok about, even if there are few hell-yes elements. But, as is usual with politicians, the devil’s in the detail, and most of the money for the tax cuts are, it seems simply being switched from public sector funding. At some point that spending is going to have to go back to the public sector. Probably funded by tax rises, no matter which hue the party in power is.

The new Home Secretary’s pre-Christmas jolly to Kigali to try and sign off on the Rwandan asylum-seekers policy might also appeal to those former red wall voters, if, of course, it was immigration that changed their hue in the first place. It’s not a policy that has met with universal approbation though, not even with the Tory Party itself. So selling it to the nation might be a harder task than Sunak believes.

There’s talk of a Spring election, there’s talk of Sunak hanging on until the bitter end. If he thinks he can climb back up the polls if he leaves it a year then it might be December, or the Autumn, if he thinks he should cut his losses and head back to his counting house, then we might be back at the circus in the Spring.

 

Told you.