Rishi Sunak’s resignation was, without question, a brave, honourable and dignified decision. By stepping away from the cabinet, the Chancellor Rishi Sunak may well have done enough to salvage his reputation among Conservative MPs and party members. Perhaps he might even have rescued what was once seen as a potentially meteoric career. But although he may be missed as a politician, one thing is clear: Sunak won’t be missed as Chancellor. In reality, he was a catastrophe in the role – and now that he has gone, his successor will have a chance to reverse his policies.
Whether Sunak has penned a note for his successor quipping that the money is all gone remains to be seen. He undoubtedly should. The Chancellor leaves a worse legacy than perhaps any predecessor of modern times. Inflation is running at nine per cent. The trade deficit has blown out to a mind-boggling eight per cent of GDP. The pound is tanking on the currency markets, real wages are collapsing, strikes are rampant, and the economy is heading for a recession. It is possible that Tony Barber, Edward Heath’s Chancellor of the early 1970s, left the nation’s finances in a worse state. But even that is debatable.
Not all of that is Sunak’s fault, of course. He didn’t start the pandemic, or the war in Ukraine, and inflation is a global problem. But if we are being honest, too much of the blame lies at Sunak’s door. He has introduced a series of damaging tax rises that have dented confidence, and drained demand and investment from the economy. His planned increase in corporation tax looks crazy right now; the increase in National Insurance has had to be compensated for almost immediately; and far too many people have been dragged into the highest tax brackets. Sunak taxed too much, spent too much, and showed too little interest in pro-enterprise reforms. It was just gimmick after gimmick, with little evidence of coherence or principle. It is hardly a surprise it has all gone so badly wrong.
Whether Johnson survives the resignation of his Chancellor and Heath Secretary, we will find out over the next few days (or perhaps hours). Whether he does or doesn’t, however, we will soon have a new Chancellor. That needs to be an opportunity to re-set economic policy. Scrap the corporation tax increase, reverse the NI hike, set out a clear new mandate for the Bank of England, and most importantly put the public finances back on a sustainable path by bringing spending under control. It is, almost certainly, too late to salvage the economic record of the Johnson administration now. But at least Sunak’s successor can have a go.
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