'There Is No Alternative'

In a previous life, when David Cameron’s government proclaimed austerity the solution to the country’s economic problems, his political team borrowed Thatcher’s acronym to justify the difficult decisions. TINA, it went – There Is No Alternative. Cuts to social care, restrictions on benefits, big rises in tuition fees all took place – but by and large, the Coalition stayed united around the TINA principle.?

?The Conservatives – and the country – are now on a fourth PM since the Coalition.?There will be plenty of comparisons with the austerity era in comment pages over the next few days. But there’s an important unknown here — whether the Tories can still unite around that sort of agenda.

It’s worth noting that this was a genuinely detailed and wide-ranging statement. It wasn’t just reversing the ‘mini’ Budget – Jeremy Hunt used this fiscal event much like Gordon Brown once did to assert himself over domestic policy implementation. Two reviews were even commissioned which will report back jointly to the education / health secretaries and the Chancellor. There’s a potentially very significant piece of work led by Patrick Vallance on regulatory change for emerging technology and life sciences. The announcement Sizewell C will be taken forward; new devolution deals and new elected mayors; green energy alternative schemes; a National Living Wage rise – there was plenty of policy here.

In the abstract, of course, Tory backbenchers agree with Rishi Sunak and Jeremy Hunt that “difficult decisions” are imperative. It’s far from clear to what extent the party will be happy with the specifics of fiscal consolidation and spending restraint outlined today.?The first threat to vote against tax rises in the Autumn Statement, from Esther McVey – who once ran on a joint leadership ticket with Jeremy, don’t forget – came before it had even been delivered…

Now that the government is doggedly pursuing stability by trying to regain market confidence, international economic comparisons will matter increasingly during the rest of this Parliament. The Chancellor tried to head that off from the Despatch Box by pointing to places where interest rates and inflation are currently higher. If bodies like the OECD and the IMF provide evidence that other countries are addressing debt burdens, inflation and the spectre of recession faster than the UK, the pressure on Downing Street will only intensify.

The decisions taken today will cast a long shadow in Government. Four years working with Jeremy Hunt taught me (among other things) that he’s one of life’s great optimists, but this isn’t a case of pain being with us only in the very short term. The OBR think unemployment will peak in 2024, almost certainly an election year. Ongoing pay restraint will make industrial relations disputes more challenging to settle, public services like the NHS are already under severe strain, and unprotected departments will have invidious choices to make.

Meanwhile, Labour’s vertiginous poll leads puts the spotlight on their response — and the alternative they offer.?How much of this package will they actively oppose? What will their attitude be in an election campaign to Jeremy’s two new fiscal rules? Now the Government has backed an extension to windfall taxes on energy producers, what new policy alternatives will they stand for?

There’s strategic clarity in what the Chancellor did today – try to restrict the length and depth of a recession, and in working to address inflation, give the Bank of England room to limit interest rate rises. But how much of the economic damage this government can repair, and how much electoral credit is available for that, remains to be seen.