Rishi Sunak has a two-stage economic strategy for Conservative recovery in time for the next election. First, bring down inflation. Second, hope that growth returns fast enough to revive public confidence. The problem is that the measures currently preferred for completing stage one make arrival at stage two less likely.
The condition of public services is a case in point. Earlier this week, Jeremy Hunt said the Treasury would not raise new revenue to fund higher wages in the public sector. Current budgets envisage 3.5% increases, while the independent pay review body recommends a range of 5% to 6.5% – still a cut in real terms. The chancellor rules out borrowing or raising taxes to finance even modest pay rises, preferring departmental cuts, which would further degrade frontline services.
