Unlock the Publisher’s Digest for free
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
Rishi Sunak urged Conservative MPs to unite or face electoral fate, in an end-of-term speech in which he argued that an improving economy would come to the party’s rescue.
The Prime Minister stressed that inflation falling to 3.4% was evidence of a “new economic moment” for the country and vowed to continue cutting national insurance in the next parliament.
After two weeks of party divisions and speculation about his leadership, Sunak was greeted by his MPs with a traditional show of support: a sustained, minute-long knock on desks.
“He said from the beginning: ‘United we stand, divided we fall’,” said one MP at the 1922 Tory backbench committee meeting. Many of those present joined Sunak in calling for an end to the party’s infighting.
“We are in the fight for our lives,” Sunak told MPs. “This fight will define us. When the going got tough, when the polls were against us, did we dig deep and fight or did we turn inward?
However some Conservative MPs believe Sunak will be in trouble if the party is defeated in the May 2 local elections. One Conservative critic of Sunak said: “The more people bang on the desk, the more trouble the prime minister gets into.”
Former Tory prime minister Theresa May was greeted by similar shows of support at a 1922 meeting shortly before her defenestration in 2017. May laughed as she left Wednesday’s meeting when asked if she had missed such meetings.
Sir Jake Berry, former Tory chairman, was a dissenting voice, claiming that Number 10 had advised that he was plotting against Sunak – a claim Berry adamantly denied. Sunak said he would look into the matter.
Sunak urged his MPs to focus in the coming weeks on what he said was Labour’s poor record in places like Wales, London and Birmingham, and to promote the incumbent Conservatives’ record.
The Prime Minister pointed to falling inflation as evidence that his economic plan was working on Wednesday as he tried to launch his response ahead of the House of Commons’ Easter recess, which begins on Tuesday.
Sunak told the BBC that if he won the next general election he would “make progress” towards his goal of abolishing employee pension contributions. He has cut the fare from 12p to 20p since last November.
His comment that he wants to cut NICs “in the next parliament” suggests that if the chancellor, Jeremy Hunt, were to deliver an autumn tax cut statement before the election, he might instead focus on headline-grabbing income tax cuts.
Earlier, at Prime Minister’s Questions, Labor leader Sir Keir Starmer challenged Sunak to call a general election, adding: “We are ready.”
Official data on Wednesday morning showed UK inflation fell to its lowest level in more than two years, with consumer prices rising at an annual rate of 3.4% in February.
Sunak’s aides admitted that falling energy and food prices had led to falling inflation, but said the government had helped rein in public spending and implement supply-side reforms.
The drop from 4% in January has encouraged Number 10 to believe inflation could fall below the Bank of England’s 2% target before the general election, due in the autumn.
A fall in inflation – and the possibility of pre-election cuts to the BoE’s key rate of 5.25% – are an essential part of Sunak’s strategy as he tries to claw his way into the 20-point lead in the Labor in opinion polls.
“If we are to have any chance we need to put the idea in voters’ minds that the economy is on the right track and that there might be a risk if they switch to Labour,” said one Tory strategist.
Labor officials privately admit the economy is changing but believe it is too late to help Sunak, especially as many families are still abandoning fixed-rate mortgages and moving on to more expensive deals.
To counter the Conservatives’ emphasis on sound economic management, Shadow Chancellor Rachel Reeves underlined her commitment to “stability” at her Mais conference in the City of London on Tuesday.
Lord Nick Macpherson, former permanent secretary to the Treasury, said that, contrary to Westminster’s expectations, the economy would recover by the autumn and that “it could be a very good election to win”.
Sir Ed Davey, leader of the Liberal Democrats, had earlier launched his party’s campaign for the May 2 local elections in England and Wales, aiming to topple the Conservatives in the “blue wall” seats of the south.
“When I talk to longtime Conservative voters, they tell me the party no longer speaks for them,” he said.
Some Conservative MPs believe Sunak could face fresh criticism over his leadership if the party fares badly in council elections, but a majority of MPs believe trying to replace him would be disastrously counterproductive.
Jonathan Gullis, MP for Stoke-on-Trent North, said at the 1922 meeting that the prime minister’s critics should “grow up”. Sir Edward Leigh, a veteran MP, reminded younger colleagues that “your best day in opposition is worse than your worst day in government”.