DAN HODGES: Downing Street’s headless chickens are flapping

A statue of Margaret Thatcher was erected in her home town of Grantham last Sunday. Within two hours, the deputy director of an arts centre at the University of Leicester had showered it in yolk. 

Soon after, an enterprising journalist set up a nearby egg stall. Local residents drifted by, expressing a mix of admiration and concern, while a council CCTV camera kept a beady eye on proceedings.

The minor flurry of excitement over the belated unveiling of a monument to Britain’s most transformative and divisive peacetime Prime Minister will fade over the coming days. 

But after the vandals, hawkers and gawkers have moved on, it might be an idea for a couple of other people to take a quick trip up the A1 to pay their respects. And reflect.

Those two are the rudderless Boris Johnson and Rishi Sunak.

Faced with what the Prime Minister describes as ‘the Covid aftershocks’ – but which the rest of the nation identifies as ‘the cost of living crisis’ – they are paralysed. They have no plan. They have no strategy. They have no vision. Their programme – to the extent that one exists – has no underpinning ideological foundation.

In other words, none of the factors that made Mrs Thatcher the defining politician of the post-war era. ‘The problem with the modern Tory Party is everyone wants to claim they’re a Thatcherite,’ one of the party’s grandees told me recently, ‘but none of them has the first clue what Thatcherism actually means.’

In fact, I think a large number of them do. But from the current occupant of No 10 down, they cannot bring themselves to accept the hard truth of what that requires from themselves and their party.

On Wednesday, Sky News’s Sam Coates reported how he’d been on the Commons Terrace and been struck by how many Tory MPs were at a loss to articulate what they thought their Government should be doing about the rising cost of living. ‘They are running round like headless chickens,’ he said.

Well, I was also in the Commons and it was much worse than that.

Headless chickens at least generate some nominal forward motion born of residual muscle memory. Yet the MPs I spoke to were unable to agree to any ideas that could produce even the most basic political momentum.

Some want a windfall tax on energy firms. Others view this as heresy.

Some want tax cuts. Others want tax revenues ploughed into an urgent uprating of benefits. Some want additional borrowing to provide direct aid with people’s soaring bills. Others want all available funds focused on Levelling Up.

Some more think there has to be steely concentration on paying down the national debt.

Though to be fair, these Tory MPs could be forgiven for pushing each of these competing and directly contradictory proposals given that all, at one time or another, have been presented as official Government policy. Usually within the space of two or three days. Or, in the case of the Chancellor’s Budget and spring financial statements, in the space of the same speech.

The time has come for the headless chickens – in No 10, No 11 and on the Tory backbenches – to stop flapping. They need to get a grip. And they need to start taking the hard but necessary decisions to get the cost-of-living crisis under control. The first of which must be to stop shilly-shallying around and introduce the windfall tax.

As one Government adviser told me: ‘Our biggest success has been to attract investment – and windfall taxes can create uncertainty and could undermine that. By Christmas such a tax will have happened.’

But Christmas will be too late. Not only for hard-pressed consumers but for under-pressure Tory MPs.

To restore public confidence in the Government, Ministers need to act decisively, and be seen to act decisively.

Yet they appear to be caught in Sir Keir Starmer’s headlights, alternately rubbishing his backing of a windfall tax, then opening the door to it. And the last thing Johnson and Sunak need is to stall, dither and delay, then acknowledge with hindsight that Labour’s Captain Hindsight was right after all.

Crucially, too, they need to get hold of interest-rate policy.

And to achieve that they must axe the Bank of England’s Monetary Policy Committee. As the nation has surged towards double-digit inflation, the committee hasn’t so much been asleep at the wheel as stretched across the back seat, comatose. Its prime responsibility is to keep inflation under control. 

But last week the committee’s most senior member, Bank of England Governor Andrew Bailey, warned we face ‘apocalyptic’ price rises, and claimed he was incapable of taking any action that would stop inflation hitting ten per cent.

This is the same man who was warned by the International Monetary Fund in December over ‘inaction bias’ on interest rates. And the same man who – while on a £575,000 salary – begged others to ‘think and reflect’ before accepting pay rises in a desperate attempt to get the working men and women of Britain to bail out his own failed monetary strategy. But the major problem is not that the MPC’s senior members are incompetent, out of touch or unaccountable. It’s that they are not aligned with the Government’s – admittedly threadbare – economic masterplan.

Last week it was announced that Rishi had asked Dr Swati Dhingra, Associate Professor at the London School of Economics, to join the MPC. Dr Dhingra may be a brilliant economist. But given that she said in 2019 that ‘from an economic perspective, the best policy would be to cancel Brexit’, it’s difficult to see how her appointment will help bring order to the current fiscal chaos.

And then there is the third – and from the perspective of Tory Ministers and MPs the most unpalatable – measure that Boris and Rishi must implement. Which is to turn off the spending taps and drain money from the economy.

A hike in benefits. Bigger heating allowances. More support to pay food bills. Generous tax cuts. Yes, these represent compassionate ideas for difficult times. They would be popular. They are certainly what many Conservative MPs are clamouring for. But in the face of an inflationary crisis, these would also prove disastrous.

Every additional pound the Government pumps into people’s pockets is a pound that will stoke inflation further. But tackling the cost of living crisis by throwing money at it is like trying to save a house from burning down by dousing every room with petrol.

This is not what Tory MPs want to hear. Nor is it what the Prime Minister and Chancellor want to hear. Boris’s boosterism, and Rishi’s obsession with burnishing Brand Sunak, will not countenance it.

‘We will be able to look after people, as we did during Covid,’ Boris boasted at Prime Minister’s Questions last Wednesday. But that’s a fantasy at best, and a cruel deception at worst.

Ministers spent £400 billion protecting the nation from the pandemic. There simply isn’t the scope to dig deep into the coffers again to insulate people from its continuing aftershocks, and then once more when they are hit by the almost inevitable global recession that follows.

If Boris and his Cabinet genuinely want to look after the British people, they have to be straight with us. There are no quick fixes to the cost-of-living crisis. There are certainly no painless fixes.

And the next 12 months will see great hardship falling on a great many families.

If Ministers remain unwilling to admit this, they should visit Grantham. They should look up at the statue that gazes across the town’s St Peter’s Hill Green. And they should realise that what voters need now are not boosters or brand managers but leaders with steel in their spines, and in their souls.