Fundamentals matter in politics — but having the right instincts helps

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. The year is easing gracefully to a close (as, I hope, will the train to the lovely holiday home we’re renting in Lincolnshire). Some more thoughts on what I got wrong and how the lessons from previous self-audits have held up.

The bigger picture

During the 2017 general election, I spent a lot of time explaining in great detail why the country was in a bad state and why Jeremy Corbyn’s campaign was tapping into public disaffection. Even so, I then said this wouldn’t matter at all because, you know, it’s Corbyn. My big lesson from this period was that the underlying fundamentals really matter a lot. (In the UK at least: we may be due to get a sharp demonstration that fundamentals don’t matter very much in the US next year.)

That’s the biggest reason why I wrote at the start of the year that I didn’t think that the Labour poll lead would look all that different at the end of 2023. This prediction was both wrong and right. It was wrong because the Labour lead is down a bit, from 20 points ahead for most of the last 11 months to about 18 points this month. But of course, the crucial thing that has happened in the last month has been a real and sustained fall in inflation, which I think is why you have the apparent paradox of “Labour lead on tackling immigration goes up, Rishi Sunak’s own approval ratings decline further, Conservative vote goes up a bit”.

That said, while fundamentals are about, ooh, let’s say eight-tenths of the law in British politics, the other 20 per cent is still significant. We can see that in another way I was wrong, in that Sunak’s own approval rating has drastically worsened over the course of the year. (I thought that the polls wouldn’t change in either direction: Labour’s lead would remain as it was, Sunak would remain more popular than his party.) I don’t think that the prime minister’s current standing is particularly surprising seeing as his political strategy has lurched all over the place: the candidate for change one week, the candidate for bringing back David Cameron the next.

I don’t think politics has hard and fast laws (after 2017 I was going too far when I said fundamentals matter as if they were all that matter) but I do think it tends to have rules of thumb (ie sure, you can change Liz Truss for Sunak but you can’t change the underlying social conditions).

That’s worth watching next year, of course, because for the first time, at least some of the underlying economic fundamentals don’t look unutterably bleak for the country and by extension for the government.

A flagship scheme and rocky steering

The point of this exercise isn’t just that it’s a good bit of intellectual hygiene and an easy bit of content at the end of the year (though those reasons do play a small role). It is that hopefully this process sharpens my thinking, or at least establishes some useful heuristics that are more reliable and perform better than I did. So I wanted to look at how some of those rules have been performing so far.

This has been a pretty good year for “governments don’t win by-elections”, Uxbridge aside. Mid-Bedfordshire was a bit of a blow to “Never write the Liberal Democrats off in a by-election”. That said, both these heuristics continue to do pretty well.

One of the lessons I took from last year was “Rishi Sunak has a great deal of political courage”, which I think has held up pretty well. You can read my 2022 takeaways here: part one and part two.

In the past year Sunak has made some brave political choices, from taking on his own party on the Windsor framework, to running against his predecessors as the change candidate, to angering his right flank by bringing back David Cameron, to upsetting his left flank by watering down the government’s climate commitments, to enraging his right flank by sacking Suella Braverman, to irking almost everybody in his party with his plans to “fix” the government’s stalled Rwanda policy.

This is a good reminder, though, that courage is not in and of itself much use if you do not appear to have much in the way of political instinct. Sunak has made some brave political calls but he has not made particularly consistent ones. His has been the bravery of someone driving with a blindfold on: you have to admire his guts but it’s hard to discern a direction, nor is it particularly tempting to get onboard.

But Sunak’s political courage is worth thinking about in terms of mistakes I might make next year — one rule of thumb that is worth remembering is “governments which are behind in the polls do not go to the country any earlier than they have to”, which would suggest the next election will happen in the autumn of next year or later. (As George Parker said on our podcast this week, this is very much where the centre of gravity in Downing Street is at the moment.)

It would be brave but foolish to go to the country any earlier. But Sunak has shown that “brave but foolish” is a zone he occupies quite a lot.

Now try this

That’s it from us this year. My thanks to all of you for reading the newsletter, and to everyone at the FT, particularly to Georgina.

I’m cooking goose this year using this recipe by Polly Russell. However you spend the festive break, have a lovely one, and my very best wishes for 2024. Inside Politics will be back on January 3, kicking off with some guest appearances. See you in the new year!

PS. On that note, if you’d like to have lunch with me as part of the FT’s annual charity auction, there’s still time to place a bid. All proceeds go to the FT’s Financial Literacy and Inclusion Campaign charity. Thank you!

Top stories today

• Fall on me | The UK economy shrank slightly in the third quarter, according to revised figures that highlight the country’s struggle to shake off its low-growth performance.

• Hunt’s hopes | Jeremy Hunt has raised the prospect of the Bank of England cutting interest rates in 2024. The BoE, however, has been insisting it is too soon to discuss easing policy.

• U-turn on immigration reform | The UK government has said its plans to increase the salary threshold needed to sponsor a loved one for a visa will begin with a jump to £29,000, after a widespread backlash to proposals to increase the level as high as £38,700.

• Thanks a million | Labour mayors have accused the government of insulting northern England after it promoted pothole funding for London as part of “Network North”, Rishi Sunak’s plan to redirect high speed rail money to local transport upgrades.