THE Conservatives are toast.

Under the circumstances, Jeremy Hunt performed as well as anyone could have done in last week’s Autumn Statement. He and his new boss Rishi Sunak are good men working as hard and effectively as they can. They are getting the big calls right. But it won’t be enough to save their party’s electoral fortunes.

In a sense, this is unfair, given that much of what is going wrong is not actually the Government’s fault. But it won’t matter. Come the election there will be nobody but the Government for the voters to punish. And of one thing we may be sure: the voters are certain to be in a punishing mood.

The first thing to notice about last week’s fiscal event is how low the bar was set against which it was initially assessed. The markets did not panic. There was no adverse reaction in the City. The pound survived intact. The Bank of England was not called upon to take emergency action bailing out the nation’s currency.

Rather obviously, all of this is to the good. That these are the measuring sticks by which a Tory mini-Budget has come to be evaluated, however, shows just how catastrophic a legacy Mr Hunt and Mr Sunak’s immediate predecessors bequeathed them. Take another bow, Kwasi Kwarteng and Liz Truss, for you have assuredly left your mark.

After the relief that there was no great crash (or bang or wallop), though the grim reality of Britain’s dire economic state is biting. Wherever you look the picture is bleak. Growth is desperately weak. Inflation is horrific. Taxes are rising. Public spending is to be cut all over again. The Autumn Statement was, in the IFS’s characteristic understatement, “a sombre affair”.

Too right it was. As the OBR has reported, the next two years will see the biggest fall in household incomes in generations. As energy bills and food costs go up and up again, so too the Treasury’s reach into our pockets grows ever longer. As a country we will be paying more in tax than we have at any point since the Second World War. And yet, despite all this, public spending will still be cut. Truly, we are living beyond our means.

Will the national debt – and the price we must pay for it – fall as a result? No, it will not. Will borrowing be brought back to sustainable levels as a result of the tax hikes and spending cuts Mr Hunt has outlined? Not in the short term, no it will not. Years of economic pain will have to be endured before we properly recover. This is the worst state the British economy has been in for generations. Just about the only indicator which is not a cause for consternation right now is unemployment. Alongside record numbers of jobs in the British economy sit significant numbers of job vacancies. If we can be grateful for one thing, it is that there is no shortage of work.

It would be bad enough were the economy merely suffering the aftershock of a decade of boom and growth, but this is no hangover. Living standards have been more or less flat-lining since 2008. And now, despite an astonishing £100 billion of additional government support being pumped in, household incomes still face an eye-watering 7% reduction.

In the main, Mr Hunt is doing the right thing to address the mess we are in. The biggest tax hikes will fall not on the poor, but on higher-income households. In 1990 only 4% of income tax payers paid income tax at the additional rate: by next year that figure will have been pushed up to 11%. Hundreds of thousands of families will be paying income tax at the highest rate for the first time. This is only right and proper: those with the biggest shoulders should indeed carry the greatest burden. But it will cost the Tories thousands of votes – and dozens of seats.

The causes of our present discontent are many and varied. First, we are paying the price of lockdown. Shutting down the country’s economy, with the Government paying the wages of workers for whom going to work had become a criminal offence, was always going to cost us dear. There is a very big bill to pay. Second, as we all know, Putin’s war in Ukraine has had a devastating effect on energy prices, food supplies, and global security.

Britain is far from alone in suffering the consequences of the pandemic and the war. The IMF estimates that one-third of the world’s economy is, like Britain’s, in recession, and has reported that two-thirds of G20 members are currently seeing inflation above 7%. But voters in the UK cannot cast their ballots to reverse lockdown, to oust Putin from the Kremlin, or even to remove him from Ukraine. They can use them only to eject the Tories from office. That may not be altogether fair, but them’s the breaks, as Boris Johnson once noted.

The elephant in the room – ever present but never discussed – is Brexit. I know of no one who thinks leaving the EU has made matters better. But as a country we are as divided as ever on whether this is because we have drifted too far away from the safety of the European single market, or because we have failed to remove ourselves far enough from the stranglehold of growth-busting European over-regulation. Certainly, the Brexiters’ dream of a new, invigorated, “Singapore on Thames”, low-tax and regulation-lite, supercharged British economy is dead. Indeed, the chat now is all about drawing closer once again to the European economic model, towards a Swiss-style Brexit.

To the wilder Brexiters this smacks of surrender and betrayal. To the rest of us, it is just further recognition that all the Tories can hope for now is to mitigate the damage. They know they are losing. The only question is: by how much?

Adam Tomkins was a Conservative MSP for the Glasgow Region from 2016-2021

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