David Gauke: So what’s your alternative to Sunak? Johnson, who may be kicked out of Parliament? Or Truss, who crashed the economy? | Conservative Home

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

For the Conservative Party, Thursday’s local election results were bad. Very bad. When you try to anchor expectations with a worst-case scenario estimate of losses and then exceed it, matters have not gone well.

The next test is how the party reacts. Given that it has been more united and more disciplined than it might have been in recent months, there is a good chance that it will avoid panic.

But the recent calm has been based on a presumption that Rishi Sunak could deliver a general election victory next year. A senior MP, and no slavish loyalist, told me a few weeks ago that he thought there was a one in three chance of a Conservative majority at the next election. That now looks very optimistic. If defeat is looking inevitable, calls will grow to take risks, differentiate further from Labour and provide the electorate with an attractive retail offer.

No head of steam has built up against the Prime Minister yet. The timing of the coronation helped, and most Conservative MPs know that he is more popular than the party, and that he inherited an appalling situation from his predecessors. There is a minority of the Parliamentary {arty, however, in denial about the events of 2022.

“[Sunak] started the chaos by knifing the most successful Tory election winner in 50 years”, one Tory source has been quoted in as saying. “Sunak’s claim that stability has been restored has been shot to bits.” It is plausible to think that plenty of party members, including many of the thousand ex-councillors, may share that view.

In that context, we are starting to hear calls for a change of course. This generally consists of a combination of calling for tax cuts and leaning in to the apparent realignment of politics and concentrating on Brexit-voting social conservatives. Alongside the policy calls, we will certainly hear demands for constitutional changes to the Conservative Party to put more power into the hands of party members, largely coming from the Conservative Democratic Organisation.

All of this would be precisely the wrong thing to do.

To understand last week’s election results, it is necessary to comprehend the damage that was done by the premierships of Boris Johnson and Liz Truss.

Johnson left office in disgrace because his colleagues did not believe him to be truthful – not the Labour Party or the BBC or the civil service or any other part of any supposed new liberal elite but Conservative MPs. Tory MPs who were prepared to stand under his leadership in a general election and, in many cases, serve as Ministers under his administration. And yet even they concluded that he could not be trusted.

This continues to damage the Conservatives reputation for integrity, a factor that continues to damage the party’s electoral performance. Nor is it ancient history. The Privileges Committee is continuing its enquiries and will probably find that Johnson misled Parliament. For what it is worth, my guess is that the Conservative MPs will ensure he is not suspended for ten days or more, but whatever conclusion is reached will remind the public of partygate.

After Johnson went, the party members had their say and got Liz Truss and tax cuts. This resulted in a collapse in market confidence, higher interest rates and terrible damage to the Conservatives’ reputation for economic competence.

Sunak and Jeremy Hunt restored market confidence very quickly but, unsurprisingly, voters will blame the Government for higher mortgage rates even if, at this point, they reflect general economic conditions, not the impact of Trussonomics. But a political party will only get so much credit for being sensible when all this was very clearly a last resort. The damage done to the Conservatives’ reputation for economic competence by the fallout from the mini-Budget is immense. It is not a good advert either for an agenda of tax cuts or for giving more power to the grassroots.

A reminder of the fiscal reality is necessary. The fiscal rules currently in place are pretty loose, merely requiring borrowing to be below three per cent of GDP in the fifth year of the scorecard with, at the same time, debt falling as a proportion of GDP.

At the March Budget, these rules were met by a whisker and only because of a series of assumptions on tax and spending policy that are implausible (fuel duty going up, the temporary capital allowances regime not being extended, very tight spending control after 2024). Tax receipts may be running ahead of the Office for Budget Responsibility’s March forecasts but a substantial retail offer of tax cuts will blow a hole in the public finances. The public will not forgive a second reckless fiscal gamble.

The other electoral strategy is to double-down on the Red Wall and appeal to working class Leave voters. Matt Goodwin has made that case, criticising the Government as having failed to reduce immigration, refused to take the necessary action to stop illegal immigration, taken little interest in “building a new social contract” and “consistently failed to take on the radical woke progressive Left”.

Where to begin? When the evidence of labour shortages is all around us, slashing immigration would be economically damaging, as well as damaging public services. A “new social contract” sounds exciting but also expensive. How will it be paid for? Was it ever feasible to hold on to all of the working class Brexit voters when attention focused on cost of living issues?

In any event, the Brexit wars are more distant, and Brexit itself is widely seen (even by Leavers) as a failure. And, as a political strategy, this would not be cost free. It would mean writing off dozens of Home County constituencies to the Liberal Democrats. The evidence from the local elections is not that the voters are abandoning the Tories to back Reform or Ukip but parties of the centre and the left.

That the Conservative Party is in an electoral hole is not in doubt. There is a very strong chance that it will be in opposition after the next general election. An optimistic view is that opposition poll leads tend to narrow in the last year of a Parliament; the economy could well be in a better place in 2024; one explanation for last week’s results is that Conservative voters stayed at home and will turnout in greater numbers next year; and Labour is not exciting the country.

The reality is that any government in office after 13 years during a period of intense cost of living pressures would be in difficulty, but matters are made much worse by the failures of the Johnson and Truss era. Listening to those who favour the return of Johnson or the economic policies of Truss or the cultural policies of Nigel Farage would be a very great error. The situation for the Tories is bad, but it can be made worse.