Jeremy Hunt’s risky ‘carrot and stick’ policies could help revive Tory fortunes

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Good morning from Manchester. What is the lesson from the Uxbridge by-election, where the Conservative party succeeded in staving off defeat?

One interpretation is strictly literal: it shows that there is a path to a narrow Tory victory at the next election that runs through discarding any environmental policy that imposes costs on individuals and through loudly trumpeting the needs of car users. That’s the political logic behind the government’s “plan for motorists”.

The other reading — and the one I favour — is that it shows that the country isn’t yet screening out the Conservatives. If a by-election in these circumstances had taken place in 1996, the Labour party would have won it, because voters had stopped listening to the Tory party and they really, really, really loved Tony Blair.

In 2023 it is different: people think the Conservative party is exhausted, divided, incompetent and less moderate than Labour, and they think Keir Starmer is hireable. But they aren’t yet shutting the door on the Tory party’s attempts to persuade them otherwise. That’s one reason why Jeremy Hunt’s speech today, which previews many of the big political arguments he will try to make in the autumn statement, may help win an unprecedented fifth term for the Conservatives. Some thoughts on that below.

Workers and shirkers

Jeremy Hunt will back a rise in the national living wage to at least £11 an hour and pledge to roll out a series of tough sanctions to reduce the number of people who are claiming unemployment benefit in today’s speech — George Parker and Lucy Fisher have the inside track.

If any of this sounds familiar to you, it’s because it is remarkably similar to the position that George Osborne set out in his budgets, a policy combination that was incredibly effective at putting Labour on the back foot — until it exploded in the government’s face shortly after the 2015 budget. Osborne’s attempt to cut tax credits — and to balance it off by implementing a more generous minimum wage — blew up his budget and badly damaged David Cameron’s approval ratings. Given how important Cameron was to the Remain campaign and how close the referendum was, that also may well have given us Brexit and, with it, the end of the Cameron-Osborne era.

So, what’s changed? Well, what would cheer me if I were in the Labour party is that British public opinion has moved to the left across a range of issues, not least on benefits. The politics of cutting benefits and talking about “shirkers not strivers” is not as simple or as painless as it once was for Conservatives. That is why I expect that the tone of today’s speech by the chancellor will be very different. Still, while tone gets you a long way in politics, policy matters too.

But what would give me heart if I were in the Tory party is that Labour has a different problem these days: avoiding being cast as the party of yet more tax rises and more spending. Labour will try to argue that it will solve the problem of economic inactivity through growth and repairing the nation’s health — while trying to avoid making commitments to undo any reductions in the welfare budget, a tricky balance to pull off. A row over benefits and welfare reform will be difficult for both parties.

Now try this

My thanks to the various Inside Politics readers who suggested I try the Armenian Taverna and Restaurant. Georgina and I ate there alongside George Parker, Anna Gross, Peter Foster (premium subscribers: remember you can get his Britain After Brexit newsletter in your inboxes weekly by registering here) last night. It was an absolutely wonderful meal and I can’t recommend it enough.

Of course, I couldn’t eat at an Armenian restaurant without remembering my good friend and former colleague, Anoosh Chakelian, who has written a moving piece about Azerbaijan’s bombing of Nagorno-Karabakh for the New Statesman, which is worth your time, as is this smart, haunting on-the-ground report by the FT’s Polina Ivanova about the geopolitical consequences of what is happening there.

Top stories today

• ‘Underdogs’ | The Conservative party conference got off to a fractious start: the Tories’ favourite mayor declared that he would not bet on the party winning the general election, while future leadership contenders were accused of jostling for position. Party chair Greg Hands conceded that the Conservatives were likely to be running as the “underdogs” at the election, acknowledging their “difficult conversations” with voters.

• Water mess | Water companies in England and Wales are proposing sharp increases in household bills to pay for a record £96bn of investment in the water and sewage network.

• Shouldering the burden | The construction sector — hit by the housing market downturn and the potential scaling-back of big public projects such as the HS2 rail line — is bearing the brunt of a wider labour market slowdown.

• Play it the UK way | Spotify boss Daniel Ek has urged the government to use its freedom outside the EU to introduce new rules that would reduce the dominance of big tech companies. Ek said that “the UK can be nimble right now and show leadership”, claiming that Spotify was being unfairly held back by digital platforms such as Apple.

• The phone’s over | Education secretary Gillian Keegan will use her speech at conference today to announce that schools will be told to ban pupils from using mobile phones during the entire school day, the Mail’s Jason Groves and Harriet Line reported.