Jeremy Hunt restores order – but an important question remains

Good political communications is continuous, a running commentary on what the government is doing and why. That is one of the reasons Jeremy Hunt made another statement this morning, after his weekend TV appearances.

Having made new decisions about the restoration of the public finances, which he knew the markets would welcome, it made sense to announce them straight away. Not least because, if the markets respond well and the interest rate on government debt falls, it will be easier to make the sums add up when he makes his formal statement on 31 October.

If Liz Truss looked on Friday like a leader who had lost power in a coup, reading a statement drafted for her by her military captors, Hunt today looked like the coup leader reassuring the people that the civil war is over.

Friday wasn’t a coup, of course; it was a prime minister accepting that she had made a terrible mistake and pleading to be allowed to stay in her job. She imposed the wrong policy at the worst possible time; she decided to make it worse by cutting taxes by more than she promised; and then she and Kwasi Kwarteng made it worse still by communicating the policies incredibly badly.

The truest thing Hunt said over the weekend was: “There were mistakes. The prime minister’s recognised that; that is why I am here.” His appointment was an act of total surrender on Truss’s part, giving him complete power to reverse her policy and to sell that reversal.

She announced the most expensive part of the U-turn: the rise in corporation tax. But that left a big gap still to be filled, to achieve the target of stabilising debt as a share of national income within five years. Hunt filled a large part of that gap today, cancelling the cut in the basic rate of income tax “indefinitely”, and bluntly announcing “we will reverse almost all tax measures” that haven’t started the legislative process. This means the stamp duty cut, which is already law, and the national insurance cut, which is currently going through the House of Lords, will remain.

Hunt has been forced to reverse even the most popular part of the new government’s policy, the part that was copied from Labour: the energy price guarantee. At Prime Minister’s Questions last week, Truss made it her main argument that her help with gas and electricity bills would last longer than Labour’s six-month policy. Today, Hunt said the current help would expire in April.

Hunt hasn’t completed his Halloween Budget yet. There are more announcements to come to close the rest of the gap. He hasn’t specified by how much public spending will be cut and where the axe will fall – although we can assume that the foreign aid budget will be staying at 0.5 per cent of national income rather than going back up to 0.7 per cent, and that the defence budget will not be rising to Truss’s target of 2.5 per cent by 2026.

Again, Truss’s pledge in the Commons last week that she had no plans for spending cuts turned out to be empty. What, really, will be the point of her turning up to answer questions this Wednesday?

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And there are probably more tax rises to come – the Commons will, for example, this evening pass the legislation needed to extend the windfall tax (although it is not called that) to renewable electricity generators.

But it makes sense for Hunt to claim the credit for each element of the U-turn – and to emphasise how much of a U-turn it is – as he goes along. The markets have already responded well, easing his room for manoeuvre and reversing the negative feedback loop that doomed his predecessor.

Where Kwarteng frightened the markets with a bad policy and then went on TV to talk blithely about further tax cuts to come, Hunt has done the opposite, junking the policy and promising further fiscal tightening to come. Where Truss ran from the room after not answering just four questions from journalists, Hunt has gone on TV and to the House of Commons, where he has answered questions at length, because he knows that what he is doing is both right and popular – or, at least, more popular than the alternative.

After the chaos of the period since Kwarteng’s mini-Budget on 23 September, Hunt has restored order, not just to the public finances but to the government’s message. He is a good communicator, with the advantage of selling a policy that isn’t nonsense, but the more he succeeds, the more people will wonder what the point of Liz Truss is.