The Tories have had a tax problem for quite some time. But news of a recession at the end of last year has made matters much worse.

It has been an uncomfortable position, for Rishi Sunak and Jeremy Hunt, to defend the Conservative party taking the tax burden to a post-war high. The political defence has been that it was necessary to prove to markets that the UK took the state of its finances seriously, and that cutting tax was only an option when inflation meaningfully slowed down.

Reasonable points – but there’s a catch. Now, in the light of a recession, Hunt is insisting the remedy is tax cuts: ‘I do believe’ he told Sky News, ‘that if you look around the world, that the economies like the United States and Canada which have lighter taxes, particularly lighter taxes on business, tend to grow faster.’ The follow-up question, however, is always going to be: who fostered the UK’s high-tax culture in the first place?

That question has many answers, including every prime minister going back for several decades. But that is not going to be a satisfactory answer for those who are dealing with the consequences of a stagnant (and briefly contracting) economy. As I note on Coffee House this morning, it was always a curious decision for the government to pledge to ‘halve inflation’ at the same time it was going to ‘grow the economy’. The method for achieving the former – higher interest rates, set by the Bank of England – are designed to stop an economic boom, not to start one.

Yet promises were made – and they weren’t kept. The UK’s recession is very likely to be short and shallow – and anyone who wants a job is still in a great position to get one – but these graphs from The Spectator data hub illustrate why people are bound to feel the pain. Even if headline GDP figures are only taking a temporary knock, GDP per capita (which measures how prosperous, on average, a country’s residents are) has been falling for almost two years now – never properly recovering from the pandemic.

While GDP has seen a very modest increase of 1 per cent since the pandemic, GDP per capita remains 1.5 per cent lower than where it sat pre-pandemic. The latter has been contracting for seven consecutive quarters: in other words, the technical recession may have started at the end of last year, but the painful hit to economic prosperity started much earlier.

What are the solutions? Of course the government wants to highlight the Bank of England’s role in the growth figures – and the tools it holds which are out of the government’s hands. Speaking this afternoon, Hunt noted that ‘whilst interest rates are over 5 per cent, the highest in 15 years, of course growth is going to be weaker’ – a rather gentle, but still pointed reminder of what might be possible so long as the Bank keeps rates at (historically average, but these days) high levels.

The government is desperate to address the tax squeeze, too, but that is looking to be a more difficult task than was predicted a month ago. Despite both Sunak and Hunt using the Sunday papers last month to announce another round of serious tax cuts were coming; but reports today suggest the Office for Budget Responsibility has told the Chancellor overnight that there is less fiscal headroom for him to cut taxes again than there was in the Autumn Statement.

The task for the Treasury isn’t simply to cut taxes, but to change the trajectory of the tax burden, so the government can meaningfully boast that the high-tax consensus has changed. But with less money to put towards cuts, Hunt will have to decide between holding back on the tax cuts or announcing more spending cuts (for after the next general election, of course), for which there is growing scepticism any government would ever really deliver.