Why Rishi Sunak should fight the next election on tax rises

Healthy political parties talk about the same things. This doesn’t mean that the only functional political movements cluster around the centre ground, or that centrism is a good indicator of institutional order. After all, New Labour was a centrist political party but one riven by infighting and with a rule book that proved vulnerable to Corbynite takeover. Boris Johnson’s government had a policy platform to the left of David Cameron’s, but his Downing Street was a rotating clown show of continual reboots and lawbreaking parties.

What I mean is that, even if well-functioning political parties have wildly divergent solutions, they will talk about the same things because they are trying to run the same country facing the same set of problems. The UK, for instance, has an ageing population, which puts greater pressure on its healthcare system. It has a revanchist autocrat in its neighbourhood, which increases not only the demands on its own defence budget, but also the cost of energy. It is much better at educating young people than it is at reskilling its existing workforce. And, in addition to the challenges besetting countries the world over, it has erected new and heavy barriers with its nearest trade bloc.

Almost by definition, some of these problems will have radical solutions, and not all of those will be found within the confines of one political party or another. This is why Jeremy Hunt, one of the government’s most effective politicians, has brought in Patricia Hewitt, a Blair-era health secretary, to advise on NHS efficiency, while Michael Gove, the government’s most effective reformer, drew and expanded upon New Labour’s school reforms, while New Labour itself borrowed freely from its Conservative predecessors, particularly on economic policy.

But when both government and opposition are in good health, politics tends to favour the government, because the ruling parties can point to the things they are already doing to tackle the problems facing the country. All opposition parties can do is offer a risky change to the status quo.

Parties lose office for many reasons, one of which is simple bad luck: they collide into a global financial crisis, a pandemic or a war. Changing the status quo is less of a risk when the status quo is awful. But another major reason is that over time, almost all parties tend towards dysfunctionality. They respond to events not by talking about the actions needed to tackle them but by talking about the hobby horses their party wants them to pursue. Already, some Conservatives are grumbling that Hunt used his first fiscal event to raise taxes (not to mention recruiting a former Labour minister), rather than to cut them.

Politicians can’t choose the circumstances they govern in, but they can choose how they respond to them. Do they respond by talking about their own preoccupations, or by taking the necessary action to meet the challenges they face? While the UK’s tax system is far from perfect, it is, to put it mildly, unclear what “tax cuts” will help the country meet its increased defence obligations, recruit sufficient numbers of paramedics and nurses or overcome the series of hurdles in its way.

One reason why Rishi Sunak is the best available candidate to lead the Tories is that he is uniquely placed to straddle both divides. His natural political instincts — on the Channel crossings, on Brexit, on the UK’s climate target, on lockdown, on tax cuts — all incline him towards the party’s right. But he has shown a willingness to govern according to the circumstances he finds himself in, rather than according to the circumstances he would like to have.

The question, though, is how he responds when — as he inevitably will — he faces demands for change from his party’s right flank next year. While healthy political parties talk about the same things, failed political leaders also tend to act in the same way: they start to meet their internal critics halfway and then end up in a muddle.

Sunak already shows signs of this. Without a serious plan to end the recruitment and retention problems that are driving nurses and paramedics to either quit the health service or to go on strike, he runs the risk of becoming the candidate of high taxes and poor public services. One dangerous argument being made in private, and with real pull among some of his most influential ministers, is that the party should present its current measures as an unhappy transition to a more traditionally Conservative government.

The problem with that argument is that it is both implausible and untrue. The greater demands on the UK’s defence and healthcare budgets aren’t going away next year, and nor are at least some of the costs of the energy crisis.

What Sunak can, and should, do instead is meet the challenges he faces head on by saying that, yes, his government is one that will have to raise taxes and keep doing so. This is in order both to respond to the international challenges of Vladimir Putin’s war but also to the domestic ones of greater demands on public spending. But — and this is the part he should make clear to both his party and voters — the choice is not between him and some mythical tax-cutting Conservative, but between his reluctant and as-moderate-as-possible tax increases, and those of a Labour party whose tax rises are never reluctant.

stephen.bush@ft.com