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: 


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


 

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