It’s nearly nine years now since David Cameron was asked, at the height of austerity, the price of a loaf of bread.
His immortal reply was that he didn’t really know as he made his own loaves in a breadmaker, preferably with fancy Cotswolds flour. Neither he nor George Osborne ever really recovered from Nadine Dorries calling them “two posh boys who don’t know the price of milk” so maybe that’s why, when Rishi Sunak was asked on breakfast television what he’d personally noticed about the soaring cost of living, his earnest answer was the price of bread. And that’s where things fell apart. What kind of bread did he buy, the presenter demanded? A Hovis seeded thing, said the chancellor, before confiding that due to varying levels of healthiness within the family (the Peloton-toned chancellor doesn’t look like a carbs man) they “all have different breads” in their house. Or perhaps, houses. The swimming pool and gym complex the Sunaks are building at their place in Yorkshire is the talk of the Westminster tearooms, which is presumably why when the SNP’s Treasury spokesperson Alison Thewliss raised the plight of families on pre-payment meters in parliament this week, she added snippily that you can’t get them for heated pools.
It shouldn’t matter, of course, that the chancellor is loaded. It wouldn’t matter whether sourdough or brioche graced his own breakfast table if he’d just risen to the challenge of a moment where – according to the managing director of Iceland – food bank users are rejecting potatoes because they can’t afford the energy to cook them. But he didn’t, and now it’s just a question of how quickly he realises it. There’s an unfortunate pattern emerging to Sunak’s decision-making, as the former shadow Treasury aide James Meadway pointed out this week, and it’s one of initial underreaction followed by frantic running to catch up.
Sunak came to parliament on Wednesday determined to clear up the mess left by the last guy, and equally determined not to mention that the last guy was Rishi Sunak. The national insurance hike to fund health and social care, that everyone warned Old Rishi would hurt low earners? New Rishi granted a reprieve. New Rishi’s spring statement boasted of introducing the biggest single personal tax cut in a decade, without acknowledging that this was only because Old Rishi had previously announced a record-breaking tax rise and was now reversing. The shadow chancellor Rachel Reeves’s best line was that this was the spring statement of a man essentially locked in argument with himself. He’d got it wrong in last autumn’s budget, then corrected himself, and will surely be back soon to correct the new mistakes made this week – primarily the baffling decision not to raise benefits in line with the soaring cost of living, but more broadly the failure to recognise that this was a moment for ripping up the rulebook.
It’s not Sunak’s fault that as a relatively inexperienced chancellor he has now been hit by two impossible once-in-a-generation emergencies in two years, with the pandemic followed by a war in Europe pushing already high energy prices to stratospheric levels. There is no escaping the fact that both will leave us poorer, especially when coupled with Brexit (perhaps New Rishi could have a word with leave-voting Old Rishi about that one too). But unfortunately for people like the single mother who confronted him on an LBC phone-in, saying she’d had to turn the boiler off and the house was so cold she could see her breath indoors, he drew the wrong lesson from handling the pandemic.
The right lesson should have been that, faced with an overwhelming but hopefully time-limited crunch, boldness saves money in the long term; that it’s cheaper and quicker, as well as kinder, to stop people falling into a giant economic hole than to dig them out later. Sunak took a while to be persuaded of the merits of a furlough scheme keeping people attached to their jobs but once he made the leap, was rightly praised for it. Furlough helped worried people sleep at night, but it also kept consumer confidence high enough to sustain the wider economy and almost certainly helped us bounce back faster after lockdown. Helping people cope with the sharpest forecast drop in living standards since records began in the 1950s, and possibly the worst since the 1920s, demanded a similar leap of imagination.
Oil and gas prices won’t be this high for ever, because the war in Ukraine can’t (please God) last for ever and because, as Sunak himself rightly says, in a year or two we could have weaned ourselves off Russian fossil fuels. So if this is a big but relatively short-lived crisis, why not do something big but relatively short-lived to help? That something should have been heavily targeted at people with no way of paying rocketing fuel bills, but should also have nodded to those who can pay, but only by cutting out the kind of discretionary spending – taking the kids out for a treat, or those lunches from Pret that Boris Johnson was once so desperate for us all to return to a Covid-riddled office and buy – that keeps the economy afloat. Without that, we’re all at risk of sliding back towards a recession.
But instead Sunak came up with an expensive nod to everyone, spread so thinly that it will barely be felt – 5p off a litre of fuel costs the Treasury a fortune but doesn’t even take pump prices back to where they were a fortnight ago – and virtually nothing for those in most need. As the Northern Echo’s front page headline crisply put it, Is That It?
The government seems to have concluded post-pandemic that raising universal credit in a crisis only makes it more painful to take the money again afterwards, which is the only conceivable explanation for why the entire spring statement felt like a torturous exercise in dodging the most obvious way of helping the poorest people cope with rocketing inflation: just raise benefits in line with the cost of living, for heaven’s sake. But the outcome is so eye-poppingly at odds with what the times demand – the Resolution Foundation thinktank calculates that the poorest fifth of families got £136 out of Sunak’s package, and the richest £475 – as to be baffling.
All of which means New New Rishi will probably be back at the dispatch box before too long, earnestly undoing the mistakes the last guy made, but just that bit too late. Hindsight is a wonderful thing. But it’s no substitute for judgment.
Gaby Hinsliff is a Guardian columnist
Guardian Newsroom: The cost of living crisis
Join Hugh Muir, Richard Partington and Anneliese Dodds MP in a livestreamed event on the cost of living crisis and the effect on the poorest households on Thursday 14 April 2022, 8pm BST | 9pm CEST | 12pm PDT | 3pm EDT Book tickets here
