The comparison between the estimated 1,000 people crowding to get in to the Great British Growth Rally to listen to former Prime Minister Liz Truss, Ranil Jayawardena, Jacob Rees-Mogg and Priti Patel, and the row after empty row at the Conservative Party main stage was an almost poetic representation of the contrast between the energetic, optimistic “pro-growth” wing of the party, and the “pro-prudence” one.
The Chancellor’s remarks this afternoon unquestionably sit in the latter category. While good and bad idea can be found in any speech, it was hard not to see this as an incoherent agenda of policies, where even the good is in the wrong place at the wrong time.
Why else would the Chancellor be pledging an increase for the minimum wage while simultaneously calling on all other workers to be abstemious with their pay demands? Artificially increasing wages at the bottom will make movement further up the income ladder unavoidable, as the Chancellor will surely know.
At the same time as putting business on the hook for higher wages, he is also further dampening the possibility of tax cuts. The Prime Minister and Chancellor have both retained their Augustinian view on reducing the burden, it seems: “God grant me tax cuts, just not yet”. Whether or not “yet” comes before the general election is unclear, but it is difficult to believe there will be any meaningful reduction until the Government slashes public spending. Currently, it represents a higher percentage of GDP than in any year in the 1970s (apart from 1975).
The Chancellor wasn’t even willing to make a sop to cutting state spending by axing the Northern leg of HS2 – an announcement which seems to have evolved into Schrödinger’s policy, simultaneously being trailed and denied by Downing Street.
The centrepiece of Jeremy Hunt’s remarks was another crackdown on welfare claimants. There is nothing inherently wrong with this, although much of the low-hanging fruit as far as getting the “workshy” back to work has already been plucked by George Osborne and others. These measures only will ever mean something if there are new productive jobs being created. If we don’t “go for growth” then even the most brutal efforts to force people back to work may not reduce the unemployment line.
Those who believe in lower taxes and a smaller state are accustomed to disappointment when it comes to announcements from Chancellors. Even Kwasi Kwarteng, who around this time last year promised to reduce the tax burden, combined it with the largest welfare scheme in our nation’s history. They will leave Manchester let down, once more.