We have passed the Ides of March, and Boris Johnson is still in office. Until the start of Putin’s invasion of Ukraine, the conventional wisdom held that the skids were under the prime minister: his nine political lives were almost exhausted and he was seriously threatened by the none-too-subtle manoeuvres of his neighbour, Chancellor Sunak.
Then Putin emerged as an unlikely deus ex machina and the conventional wisdom became that Johnson was once more safe. Folklore tells us it is an ill wind that blows nobody any good: this truly terrible carnage in Ukraine has prompted certain observers to say this is “Johnson’s Falklands”.
Anyone who believes this needs help. In 1982, Mrs Thatcher was the most unpopular British prime minister since records began. She took a huge gamble in sending a “taskforce” to take on the Argentinians, who had invaded the Falklands. It is a long story, but the gamble came off, and Thatcher sailed to her second election victory in 1983.
There is simply no parallel, and even suggestions that the UK cannot say goodbye to a prime minister in wartime do not stand up to historical precedent. No matter how much he squirms, Johnson is haunted by the public’s rightful indignation over partygate, and much that went before. The serial lawbreaker is on weak ground when he professes to lecture Putin on international law, and he has shown himself to lack the judgment we require of leaders when comparing Ukraine’s struggle to Brexit. If one episode were needed to prove that Johnson, for all his apparent political acumen, is in fact a fool, it was that absurd claim.
But the absurdity does not stop there. We are told there is a “festival of Brexit” in the offing; what is more, the “wonders” of Brexit are going to be a main feature of his next general election campaign, if he survives that far.
Which brings us back to the chancellor. If the Roman poet Horace had been asked to forecast the impact of Sunak’s spring statement, he would no doubt have revived a line from his Ars Poetica: “Parturient montes, nascetur ridiculus mus” (“The mountains will go into labour, but all they will give birth to is a ridiculous mouse.”) For the chancellor, who had achieved enormous popularity by alleviating the financial consequences of Covid, managed, in that popular phrase, to go from hero to zero within 24 hours. This was partly the result of his manifest neglect of the hard-pressed, and partly of his disastrous attempt to present himself the next day as a “chancellor of the people”.
However, although there is a widespread impression that Johnson has seen Sunak off, I should like to suggest that the chancellor has, possibly unwittingly, put the political knife into the prime minister.
Let us face it: even before this budget, the British economy was in serious trouble. It was not alone: the sharp rise in commodity prices precipitated by the Ukraine crisis has turned what economists call the terms of trade – import prices in relation to export prices – against us and other countries dependent on imports of energy, among other things. As John Llewellyn of Llewellyn Consulting says, it is reminiscent of the oil crisis of the early 1970s: “Rising commodity prices reduce national income first, and that in turn affects domestic output.”
Now, a seriously rattled chancellor is reported to “viscerally hate” the independent Office for Budget Responsibility. This is because it has embarrassed him by doing its job: for example, pointing out that the UK has lost 15% of overseas trade as a result of Brexit; that household income is likely to fall at the sharpest rate since the 1950s; and that 27 million people on the basic rate of income tax are set to see a rise in income of 4% while inflation is close to double digits – in other words, not much sign of the post-EU pay boom promised as a result of the Brexit onslaught on immigration!
The result is that the collapse in real incomes and therefore spending power is likely to make the government even more unpopular than it now is. Not to put too fine a point upon it, the threat of recession looms. Yet Sunak is, essentially, planning another era of austerity.
I have read suggestions that Sunak has become a prisoner of the Treasury, which, except for a period when Gordon Brown was chancellor, has always wanted to cut public spending. But Sunak is a willing prisoner. He is so un-Keynesian that he wishes to cut public spending even at a time like this.
He may have receded as a candidate to replace Johnson immediately. But I suspect that his reluctance to use fiscal policy to counteract recessionary forces bodes ill for Johnson’s government.
