Next, Sunak promised voters that the economy “will grow”. Whoopee — growth is the norm. Most forecasters expect a prolonged recession this year, so a rebound in 2024 was expected anyway. Lower gas prices might even deliver positive growth sooner. But again, this would have little to do with the government, which has worsened prospects through large tax rises.
Sunak also said he would “make sure our national debt is falling” as a share of GDP. With no time frame, this surely just restates existing fiscal plans. The Office for Budget Responsibility already thinks the debt-to-GDP ratio will decline in 2024–25, albeit due to one-off Bank of England repayments. Plans for this ratio to fall sustainably beyond that are already baked in.
The promise of two outcomes already expected and then a return to some — perhaps weak — growth hardly constitutes a brave economic agenda. Indeed, what’s really noticeable here is the absence of any legislative commitments. Sunak did not spell out new policies to dampen inflation, improve growth prospects or reduce debt. He wants to enter the next election, which must be held before January 2025, taking the credit for any recovery, however inevitable, from the impacts of Covid and the war in Ukraine.
True, Sunak makes clear these pledges are not the limit of his economic ambitions. He talked vaguely about also wanting to level up the country, get more of the 8.9 million economically inactive people into work, improve education and, one day, cut taxes. Yet for a country with thorny productivity problems and innovation-free public services, it is striking that the pledges Sunak wants voters to judge him by are those expected not to entail new action.
This, of course, may be politically astute. Leading a febrile party means Sunak has neither the political capital nor the unity to deliver meaningful economic reform. He saw the consequences of Liz Truss going too far, too quickly to chase growth. Even Boris Johnson, with a large majority, couldn’t get planning reform done. One can understand, then, why Sunak thinks that some form of economic recovery, alongside dealing with NHS waiting lists and the Channel boats, may be the best he can offer the electorate.
Hanging his electoral hat on these macroeconomic indicators, though, leaves Sunak a hostage to fortune. If another energy price shock hits, or the Bank of England significantly errs, then delivering these pledges becomes impossible.
And after 12 years of stagnation, is the promise of a return to the foundations of a slow-growing economy an appealing prospect?