Labour is right to be scared of Rishi Sunak

Labour is terrified of Rishi Sunak. Today's Budget showed exactly why. The Chancellor put in an impressive performance: It was assured and hit the right notes at the right times. It also laid the groundwork for a narrative on the economy that will work very well for the Tories. Sunak told voters that George Osborne's cuts created the money that comprised the Covid recovery spending. This ties together the whole of the last decade of Tory rule in a neat package – something Boris Johnson has avoided doing with his ‘I’ve only been Prime Minister for five minutes’ routine.

Labour folk will now complain and shout ‘Tory austerity!’ until they are blue in the face. But this is unlikely to be effective: Sunak’s narrative will soon become the orthodox view. This follows the pattern of another story told by the Tories that harmed Labour a decade ago; that ‘Labour didn’t save while the sun was shining’. The Tories saved when they had to, then spent when the crisis hit; and they will cut back when needed once the economy is back on its feet in order to save our grandchildren from crippling debt. 

You can hate that story all you like – and I could poke a lot of holes in it myself – but it suits the mood of the country. Labour will clearly struggle to establish a counter-narrative half as strong.

Sunak's budget was far from perfect. The value of freeports has been grossly inflated, for instance. I’m in favour of them in general and think they should go ahead, but they aren't the silver bullet Sunak imagines them to be. I could go on, but I’d mostly just be nit picking. Because what Sunak’s speech today demonstrated to me, more than anything else I can think of in the past year, is just how far behind the Labour party is compared to their rivals in government. It also made it plain to see just how much damage the Corbyn years did to Labour and how difficult that damage will be to repair.

The comparison between the two parties is perhaps best summed up by taking a look at Anneliese Dodds’ recent lecture, in which she set out her plans for what a Labour government would do with the economy. Looking at Sunak’s budget side by side with the shadow chancellor’s speech from last month, you get a sharp sense of the current difference between the two parties in many ways.

Dodds’ speech was solid and did what it had to do. Everything in it was reasonably sensible; like Sunak’s speech today, I could pick on things I didn’t like, but all around, it was OK. Yet all it really achieved was to get the Labour party back to having an economic and fiscal policy that was no longer totally insane. It stopped big business from running away screaming. But that’s about it.

Starmer’s response today has received a lot of flak. Some of this is undeserved: it was probably as good as any Labour leader could do right now, but it was still nowhere near good enough. Sunak laid out a credible plan for the next five years, and all Starmer could counter with was some nit picking paired with the old Labour line of ‘Well, we’d spend a whole lot more than the Tories’.

It feels a bit like Starmer fell into a trap today, yet another one laid by the Tories that he has fallen for in recent months. One of the hardest thing to do as an opposition leader in this country is to respond on the hoof to the Budget after it has been read out in front of you in the Commons. Even so, it was difficult not to get the sense of a Labour party running out of the steam they got when Starmer became leader.

Sunak went a long way toward repairing the Tories’ problems with the business community caused by Brexit today as well. Whatever the problems initiated by leaving the single market and the new mountain of red tape created by that move, British businesses have two things to consider. 

One is that Labour isn't talking about taking Britain back into the single market; the other is that while the Tories have a plan for how to re-build the economy post-Covid, Labour is still trying to unwind the damage the Corbyn era did to their basic economic outlook. On the evidence of today, it will be a long road back for the Labour party.