With the Autumn Statement, Rishi Sunak and Jeremy Hunt broadly succeeded in taking the heat out of the financial markets. But as the dust settles on the details of Hunt’s fiscal proposals, other problems are emerging for the government – not least of all ongoing industrial action which threatens to envelop Britain during the festive season.
Indeed, Britain’s “winter of discontent” got colder on Friday as the Royal College of Nursing announced that its members will be staging their first set of national strikes in its 106-year history.
Hospital staff will now be rubbing shoulders with university lecturers, lower-rank civil servants, posties and rail workers on picket lines across the country. For Sunak, there is no sugar-coating the reality that Britain now faces a general strike in all but name.
However, unlike his two immediate predecessors, the prime minister has exhibited some political will toward negotiating a settlement. Mark Harper’s “positive meeting” with rail union chiefs on Thursday saw “shared” objectives stressed and conciliatory tones mutually adopted.
This was evidence of progress. RMT general secretary Mick Lynch hailed the end of the “bellicose rhetoric” which characterised Grant Shapps’s tenure as transport chief.
Given what we know about Rishi Sunak this makes sense. The PM has built his political brand around being a problem-solver politician — a pragmatist to his allies and a technocrat to his many enemies. Just like with the Autumn Statement, Sunak may put ideological instinct aside and move forward on the basis of industrial reconciliation. As a prime minister whose head is still very much in the treasury, Sunak would surely see the economic benefits of putting an end to strike action in time for Christmas.
But Sunak’s problem is that his battle is not only with the unions. The prime minister arguably faces a much more testing struggle with his own Conservative party — the political priorities of which have not changed on Britain’s unions since the 1980s.
The unions want above-inflation pay awards to combat the cost of living crisis. But equally, the Conservative party wants a scapegoat for stagflation and an end to the problematic phenom of union “militant”-turned-media celebrity.
Indeed, at a time of such inconstancy in Conservative politics, the party’s muscle memory surrounding trade union action has proved reassuringly steady. Political points that leading trade unionists are Marxists, that Labour are clueless and that pay increases would lead to a wage-price spiral have reassured us that, despite the flip-flopping over personnel, the Conservative party is still fundamentally the same beast, pursuing the same political project.
At prime minister’s questions on Wednesday, Sunak showed that he could dance to this familiar Tory tune. In a response to a question on why Britain faces the lowest growth of any OECD nation, Sunak urged Keir Starmer to get on the phone to his union “paymasters”.
The baying from the backbenches was deafening.
But while such rhetoric will buy Sunak some short-term political space, it may ultimately hinder chances for industrial reconciliation in the long run. It also creates a tyranny of expectations within Conservatism that Sunak will, in fact, show some Thatcherite resilience on the strikes.
There is, of course, no love lost between Sunak and his parliamentary party at the moment. Conservative unity is right now confined to the 12.00 p.m. – 12.45 p.m. slot on a Wednesday afternoon. Either side of this 45-minute juncture, disputes over planning reforms, onshore wind and tax rises predominate.
Simply put: many Conservative MPs think the technocrat-in-chief is not a true-blue believer on too many hot-button issues.
Having been forced to swallow Jeremy Hunt’s bitter medicine, Conservative MPs will now be looking to make a statement. The party’s identity crisis may ultimately serve to focus minds against strikers.
Fortunately for Sunak-sceptic MPs, they will find in chancellor Jeremy Hunt a union-bashing ally.
Hunt’s record for staring down strikers proceeds him; of course, as Health Secretary, he consistently refused to negotiate with junior doctors, instead accusing the strikers of “putting patients at risk” with their “wholly unnecessary” industrial action.
And much to Sunak’s chagrin, Jeremy Hunt holds the purse strings in government.
It is no secret that Hunt was not Sunak’s preferred choice for chancellor (that was Mel Stride), but back in October, the new PM could not risk another Treasury shake-up lest he spook the markets. By the time Sunak took over, Hunt had already put pen-to-paper on fiscal proposals that would eventually turn into the Autumn Statement.
Hunt, who won survivor of the year at The Spectator’s “Parliamentarian of the Year” awards this week, has adopted the persona of “difficult decision”-maker with pride. He ensured that the Autumn Statement underwent a careful process of costing and OBR forecasting — no bean went uncounted.
Hunt then presented white-faced Conservative backbenchers with a range of tax rises, insisting they were the minimum possible if the government was to maintain the economic stabilisers on welfare and pensions. The pitch was well-choreographed and Hunt played every backbench snipe with a straight bat. He was taking “compassionate” but “difficult” decisions in the name of stability.
This groundwork was laid so consummately that backbenchers will be expecting Sunak to be equally “difficult” when it comes to striking workers. For there is no hiding that meeting union demands, or forging some kind of compromise, will come with a price tag.
Any negotiated settlement with the RMT would dispel the notion that there simply was not fiscal headroom for tax cuts. This would make backbenchers, and an embarrassed Jeremy Hunt, rather unhappy.
Furthermore, with department heads urged to identify savings to manage pressures from higher inflation, ministers would not take kindly to public sector pay rises cutting into their allotted departmental spending.
So Sunak faces a now-familiar squeeze on the industrial relations issue. On the one hand, he will be working towards some kind of compromise — lest he face the wrath of the public and media accusations of deepening a “winter of discontent”. But in doing so, Sunak must first face up to his backbenchers.
And at a time of difficult trade-offs, Conservative MPs would not take kowtowing to union demands lightly.
