Rishi Sunak will sound super confident today. He will sing the praises of his budget to a very largely empty House of Commons, and will hope the media pick up his backbencher’s online cheering. And underneath that calm exterior there will be, if Sunak is remotely human, an element of massive self doubt. Because the fact is that Sunak must know three things.
The first is that the Office for Budget Responsibility, which essentially prepares the budget forecasts, has massively overestimated its budget forecasts for more than a decade, which is as long as it has existed. There is no reason to think this time is any different. It’s always easier to be optimistic about forecasts when you know that there is at least a chance that they will be right. There is no reason to think that will be true of the OBR forecasts today.
Second, in the very short term everything that Sunak says today depends on Covid being beaten by June. That is a wildly optimistic forecast because of the UK’s vaccination policy. France is seeing a signifiant vaccination effect as a result of following the prescribed action for double vaccinating within 21 days. We are not seeing anything like that vaccine impact, but are seeing a good lockdown result. That does not mean that we will not see that second dose impact in due course. But equally we do not know that we will. If that impact does not materialise, or new variants do instead, absolutely everything about this forecast is wrong and Sunak knows he will be back at the Despatch Box sooner than he would wish.
Third, Sunak knows that his scope for manoeuvre is limited by his ‘back to normal’ brigade. In particular, they want rising interest rates, lower taxes, and masses of state support for their own chosen projects. These are irreconcilable aims. Sunak must know it. Those backbencher who should be cheering might well not be, that much, as a result. It may be to Sunak’s advantage that they are not present, after all. The Tory right has lost touch with reality. No Chancellor can win against that.
I suspect Sunak can weather the Tory right wing: they are running our of alternative prime ministers.
I suspect Sunak knows that all the economic forecasts can give him are some good headlines in The Mail tomorrow.
What, if he has any sense, he worries about is Covid, because people forget forecasts, but they wont forget another completely failed budget based on wholly false promises because the government got this virus wrong all over again. Of course, they may not have got things wrong. But as with Office for Budget Responsibility forecasts, the precedents are not good.
Sunak’s smile will be fixed for the days to come. The inner man will need to be deluded to believe that all that he will be saying is true.