Analysis: Rishi Sunak Fires General Election Starting Gun With 'Red Wall Budget'

But with voters facing the biggest fall in living standards since records began, will they blame more than a decade of Conservative rule for leaving them worse off?
Chancellor of the Exchequer Rishi Sunak delivering his Spring Statement in the House of Commons, London. Picture date: Wednesday March 23, 2022.
Chancellor of the Exchequer Rishi Sunak delivering his Spring Statement in the House of Commons, London. Picture date: Wednesday March 23, 2022.
House of Commons via PA Wire/PA Images

If there was any doubt that the next election will be in 2024, it evaporated just after 1pm today.

There were still some lingering suggestions that, despite losing two years to Covid and now trailing in the polls, Boris Johnson might just be tempted to go to the country next year in search of a second Commons majority.

But Rishi Sunak put paid to that when he announced his plan to lop a penny off the basic rate of income tax by 2024, meaning Brits will notice it in their pay packets just before it’s time to vote again.

Fuel duty is also being cut by 5p until next March, although it’s difficult to see how the chancellor can realistically hike it again in a year’s time.

Throw in the raising of the national insurance contribution thresholds, which mean those earning less than £12,570 won’t pay it, and this had all the hallmarks of a traditional pre-election Tory bribe.

Tory MPs in what used to be the red wall - the once-solid Labour seats in northern England that will again be a key election battleground - welcomed Sunak’s statement.

James Grady, who won Leigh from Labour last time arouns, told HuffPost UK that it was a “red wall budget” that will go down a storm with his voters.

“I literally punched the air when he announced the change in the NI threshold, which will really help low-income workers,” he said. “The fuel duty cut will really help my constituents as well.

“People are going to notice straight away in the red wall towns, where they are really feeling the pinch.”

Another red wall MP said it was “about alleviating the pressures on the cost of living” and would be welcomed by his constituents.

As with all major fiscal events, however, the devil is in the detail. The Office for Budget Responsibility point out that the tax cuts announced today by the chancellor only offset one-sixth of the tax rises he has announced since taking on the job in 2020.

To put it another way, for every £6 Sunak is raising, he’s only giving back a pound.

Astonishingly, the amount that the government pays in debt interest is set to hit an eye-watering £83bn next year - some £60bn more than in 2020-21 and more than the day-to-day departmental spending on schools, the home office and ministry of justice combined.

The biggest reason to be announcing tax cuts, therefore, is in the hope that it will be enough to persuade voters to give the Tories another chance.

But with the OBR also predicting the biggest fall in living standards since records began in 1956, voters are just as likely to blame more than a decade of Conservative rule for leaving them worse off.

Either way, it’s clear that it will be another two years before we get to find out.

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