What do the latest figures mean for Rishi Sunak’s five pledges?

The figures published on Friday morning reveal a small amount of good news for Rishi Sunak. According to the Office for National Statistics (ONS), the economy grew by 0.5 per cent in June. This is at a point when many feared the UK would already be in recession, though that outcome has not yet been avoided.

They are certainly an improvement on the 0.1 per cent contraction recorded in May, though those results were attributed to there having been three bank holidays, one of which was in honour of the coronation. But they are also a reminder that Sunak has, very deliberately, listed the growing of the economy as one of five key pledges, to be delivered by the end of the year.

His intention, certainly, was to set his own benchmarks by which his success or failure could be judged, to prevent others from doing that for him. He was initially criticised for setting targets that were too easily achievable, and were in several cases forecast to be met anyway. But things have not gone entirely as he would have liked.

What are the prime minister’s five pledges?

They can almost always be seen as a list of bullet points on the wall, wherever he is speaking. They are to halve inflation this year, cut NHS waiting lists, get national debt falling, grow the economy, and “stop the boats”.

So how is he getting on?

The ONS announcement certainly means that the economy is growing – or at least, that it was in the month of June. But the Bank of England continues to raise interest rates, knowing full well that this risks triggering a recession –though its governor, Andy Haldane, has denied that he is trying to cause one deliberately in an effort to get control of inflation.

Either way, there is clearly a risk that two of Sunak’s pledges are now contradictory. In May, Jeremy Hunt said he was himself prepared to risk a recession if it meant getting inflation under control. The pledges are clear enough: to halve inflation and to grow the economy. If the only action that can be taken to halve inflation is to shrink the economy, then the prime minister has left himself no political wriggle room whatsoever.

A pledge to “grow the economy” is certainly a weak one. It simply means to avoid a recession, which is not an achievement a prime minister would normally brag about, so it is doubly embarrassing that his own chancellor should openly talk about the possible need for one.

So what about inflation?

For the first half of the year, inflation did not fall anywhere near as sharply as predicted. It now appears to be calming down, but inflation slowing is not the same as prices falling. In January, Sunak was mocked for setting himself such an easy target. That it has proved harder to achieve than first thought may not ultimately mean he is afforded much credit for his achievement.

There have, for example, been warnings that cheap food “may never return”. If, in a year’s time, basic goods still cost twice what they did two years ago, the government cannot expect much praise, and certainly not when there is now no ambiguity left around the cause, which is the increased bureaucracy around imports – a direct and deliberate consequence of the form of Brexit the government chose to pursue.

What about waiting lists?

NHS waiting lists, as is well known, are up, not down, from an astonishing 7.1 million when Sunak took office to 7.5 million now. He and his ministers are trying very hard to pin the blame on striking NHS staff, but it is not possible to explain away the truly enormous figures via a few instances of strike action. It is also clear that the public do not, by and large, blame striking workers for the state of the NHS.

Has he repaid national debt?

The debt numbers are terrifying. In June, the country’s national debt was higher than its GDP for the first time since 1961. People on modest salaries, say £20,000 to £30,000, probably have no idea just how much of their money is spent each month on paying interest on the national debt – in the region of £100 or more.

Sunak, as chancellor, had to borrow more than £300bn to cover the costs of the pandemic, and even on long repayment terms at low interest rates, the total amount required to pay off the debt is likely to be double that. Last month, borrowing was £28.6bn. The chances of any significant repayment, as things stand, are close to zero.

Has he ‘stopped the boats’?

This is the prime minister’s most vulnerable area by some margin. Having allowed his home secretary to pursue a policy of deliberate, performative cruelty in seeking to solve a complex and arguably intractable problem through absurd stunts of dubious legality, such as deportations to Rwanda and the use of barge accommodation, he has managed to come up with a scheme supported by absolutely no one, which has had absolutely no impact on the number of small boat arrivals.

Hundreds of asylum seekers have arrived this week, undeterred by a big government campaign to prevent them from making the crossing.

Huge numbers of voters find the policy an inhumane embarrassment. Others, who have no such concerns, can still see it as entirely unworkable. Sunak can boast of a new agreement with, for example, Albania to quickly repatriate arrivals from that country. But it has not “stopped the boats”, nor will it.

Can he turn things around in time?

An improving economic situation is likely to trump all other concerns in the event of an election next year. But it is unlikely that the five pledges will turn out to have been a good idea. Even the meeting of the least ambitious of them does not translate into any kind of improvement in living standards, just fractionally less pain.

And as perilous as the national finances might be, personal finances are likely to be far worse, given the rolling horror show on rent and mortgages.