Cost-of-living crisis could cost Boris the 2024 election

After months of self-inflicted calamities, Boris Johnson’s luck may have saved him from an early bath.

From facing an almost certain leadership challenge this year, the onset of the unjustified and brutal Russian war against Ukraine has spiked the guns of his critics on the government backbenches. With parties from across the House united in their determination to support Ukraine and stand up to Vladimir Putin’s regime, they accept that now is not the time to do something that would undermine the Government’s ability to do so.

So letters of no confidence in the PM are now being withdrawn from the 1922 Committee. The heroism of the Ukrainian people means the war may be protracted. Following the ‘partygate’ scandal, a bad showing for the Conservatives in the May local elections would normally be expected to act as a catalyst for leadership manoeuvres in the party.

That’s unlikely if the war continues towards summer. Even if the PM is fined for breaching coronavirus restrictions, while the current precarious international situation lasts, he is now more likely to survive than not.

Add to that the fact that the public inquiry into the Government’s handling of the pandemic won’t be taking evidence in public until next year, Johnson no longer appears, for the time being, in imminent danger. If he can survive until 2023, with the power once again to decide on the timing of a general election, he should be able to ensure he leads the party to the polls.

The odds on whether he could win that election, though, must be slimming. The cost-of-living crisis is yet to hit in earnest, with double digit inflation on the horizon – a level not seen since the early 1980s. Tax rises are yet to bite.

Servicing the UK’s massive debt could cost more than £1,200 per person alone over the next year, with £83bn expected to be spent on debt interest – the highest on record and four times as much as last year. 2022-23 is set to see the biggest fall in living standards in any financial year since ONS records began in the 50s.

No wonder then that, rather than the policy light financial update he would have liked to have made, Rishi Sunak had no option but to announce some big measures in his Spring Statement to try and show the public that the government is ‘on their side’.

As well as the biggest ever single cut to fuel duty, which itself follows a twelve-year freeze, there will be a big increase in the National Insurance starting threshold to match Income Tax. The latter alone will mean 70% of workers will be better off even after the coming tax rises to fund the NHS and social care.

Given the Conservatives are presiding over historically high tax rates – a position very many government backbenchers feel exposed on – the Chancellor also doubled down on his intention to cut taxes before the end of the parliament by promising a £5bn cut in the basic rate of income tax from 20% to 19% in 2024.

How far these announcements will create a fire blanket around the government in the inflation busting months ahead is anyone’s guess. More initiatives will no doubt be forthcoming at the proper Budget in the autumn. But today’s help itself comes with a big dose of reality salts.

There is headroom of about 1% of GDP in the Treasury’s planning. The Chancellor has made clear that we should be prepared for the economy and public finances to worsen, potentially significantly. The Office for Budget Responsibility says the current headroom could be “wiped out by relatively small changes to the economic outlook”. Come November, a lot could have changed, again.