London Daily

Focus on the big picture.
Friday, Feb 27, 2026

With the UK economy in freefall, Rishi Sunak clings to a fracturing Tory coalition

With the UK economy in freefall, Rishi Sunak clings to a fracturing Tory coalition

The UK prime minister has delayed the worst of his spending cuts to try to keep new Tory voters on side.

It had been billed as Austerity 2.0.

But the £55 billion package of tax rises and spending cuts unveiled by U.K. Prime Minister Rishi Sunak and Chancellor Jeremy Hunt on Thursday tried to delay the pain where possible, for as long as they could.

In a sense the pair had little choice — Brits are already facing the biggest drop in living standards on record next year as inflation, energy bills and borrowing costs soar. Hunt said Thursday evening that by delaying the worst of the cuts beyond the next election — currently expected in 2024 — he aimed to “make sure this recession is shallower, and hurts people less.”

Taxes will still rise quickly, on businesses and individuals.

But by finding extra billions for the National Health Service, schools and key government departments in the short-term, and by hiking pensions, welfare and the minimum wage in line with sky-high inflation, Hunt and Sunak hope to give themselves a fighting chance of keeping a disparate and unhappy collection of Tory voters on side.

“It suggests they are not willing to completely abandon any hope of holding together their electoral coalition,” said Rachel Wolf, director of public opinion consultancy Public First, and co-author of the 2019 Conservative Party manifesto.

Loosely summarized, the election-winning strategy pulled off by Boris Johnson — and masterminded by his former top aide Dominic Cummings — in 2019 was to retain traditional Conservative strongholds in the South while also attracting millions of first-time Tory voters in more deprived areas in the North and Midlands.

Members of Sunak’s failed leadership campaign over the summer noted grimly that he played far better among the former group, drawing crowds in the affluent shires and southern towns.

But with Thursday’s autumn statement, Sunak showed he still aspires to keep the whole of Johnson’s coalition in place. As Wolf put it: “The new Conservative voters are very, very dependent on public services, and it was a big part of what they voted for.”

Sunak had already signaled his intention to return to the winning Johnson formula of 2019 following the radical, short-lived tenure of his predecessor Liz Truss.

“I will deliver on its promise,” Sunak said of the 2019 manifesto, in his first speech outside No. 10 Downing Street. “A stronger NHS. Better schools. Safer streets.”

He also recommitted to “leveling up” — Johnson’s somewhat amorphous domestic offer, aimed at tackling deeply ingrained regional inequality through targeted investment and new infrastructure.

Adam Hawksbee, director of the center-right Onward think tank, insisted the government could still deliver tangible improvements for deprived communities, such as tackling anti-social behavior and cleaning up graffiti, even as other spending cuts bite. “Rishi’s going to have to do that if he wants to keep those new 2019 voters,” he said.

Hawksbee added that by reappointing Michael Gove as leveling up secretary and hiring Onward’s previous director, Will Tanner, Sunak had built a team at No. 10 that is “really serious about delivering this agenda.”


Delaying the pain


It was not a foregone conclusion that Sunak would do so.

As chancellor, he often acted as a brake on Johnson’s more expensive ambitions, and many had expected Thursday’s statement to include immediate spending cuts reminiscent of the “austerity” era under David Cameron and George Osborne.

Instead, the anticipated cuts were delayed until the mid-2020s, when public spending increases will be limited to 1 percent, down from a planned 3.7 percent.

But even where public services are not cut, they will be squeezed.

“The demand for those services is substantial,” said Ben Zaranko of the Institute for Fiscal Studies, a respected economic think tank, “and in some cases has been increased by the pandemic and the cost-of-living crisis. At the same time what the government is asking for, from the NHS and the justice system — none of that is being scaled back.”

This has its own electoral implications. Strained public services combined with higher energy prices, inflation and mortgage rates will hit millions of people hard over the next two years. Tories fear the blame is likely to be laid at the government’s feet.

A somber briefing by the Office for Budget Responsibility (OBR) published alongside Thursday’s statement predicted average living standards for U.K. citizens will fall 7 per cent over the two financial years, wiping out the previous eight years’ growth.

“The problem is going to be that everything feels worse,” Wolf said “There may be more money in the NHS, but people can’t get an ambulance, and they can’t see their GP and people feel like crime is going up.”

Similarly, flagship offerings to the so-called “Red Wall” of Northern voters may have been retained, but look unlikely to deliver in full. Promises of new rail infrastructure between Northern cities have been steadily watered down. A commitment to continue with the current round of “leveling up” funding came without mention of once-expected subsequent rounds of cash.

Whitehall insiders concede that Gove’s 12 “missions” for leveling up now appear unreachable, following an internal review requested by No. 10.


In search of Sunakism


With the grand Johnsonian vision unlikely ever to be delivered given the disastrous economic climate, some Tory MPs question what Sunak really has to offer beyond a basic air of competence and a certain PR sheen.

Certainly the nature of the summer leadership contest, which effectively became a battle between Sunak and Truss over sound money and lower taxes, left little space for Sunak to set out a wider agenda.

Those who know him well insist he has a broad powerful vision for the U.K.’s economic future — but accept it has yet to register with voters at all.

“Innovation policy has been a key part of what he considers to be his ideology,” said Dom Hallas, executive director of startup lobby group Coadec, who worked closely with Sunak when he was chancellor. “He comes back to it time and again.”

Hallas also noted his youthful tech-savvy, adding: “People mock the fact he wears a hoodie, but he is in his early 40s, he was born in the 1980s … I work with people who dress like that. He inhabits that realm. He isn’t in the stuffy world some people in politics are in. It filters through to his vibe.”

Jimmy McLoughlin, a former Downing Street adviser and friend of Sunak, also attested to his “deep understanding of where industry and the economy is heading, and where the opportunities for growth are.”

But he too acknowledged that while Sunak is “one of the most recognised politicians of the last 20 years, largely because of the very pragmatic response to the pandemic … less is known about what drives him.”

Other Tory figures remain unconvinced. “There’s nothing more to him than meets the eye,” a former party aide said. “He’ll have a short-lived bounce for not being Liz Truss, followed by a year and a half of being hated for the mess we’re in.”

And a former minister under Johnson added: “He is for basic economic competence and good governance, so your path to electoral success is ‘we didn’t screw it up that much’. It’s not that compelling. And it means the coalition is intensely fragile.”

Having tried almost everything apart from boring competence over recent years, the Tory Party may not have much of a choice.

Newsletter

Related Articles

0:00
0:00
Close
UK Government Reaches Framework Agreement on Release of Mandelson Vetting Files
UK Police Contracts With Israeli Surveillance Firms Spark Debate Over Ethics and Oversight
United Airlines Passenger Hears Cockpit Conversations After Accessing In-Flight Audio Channel
Spain to Conduct Border Checks on Gibraltar Arrivals Under New Post-Brexit Framework
Engie Shares Jump After $14 Billion Agreement to Acquire UK Power Grid Assets
BNP Paribas Overtakes Goldman Sachs in UK Investment Banking League Tables
Geothermal Project to Power Ten Thousand Homes Marks UK Renewable Energy Milestone
UK Visa Grants Drop Nineteen Percent in 2025 as Migration Controls Tighten
Barclays and Jefferies Among Banks Exposed to Collapse of UK Mortgage Lender MFS
UK Asylum Applications Edge Down in 2025 Despite Rise in Small Boat Crossings
Jefferies Reports Significant Exposure After Collapse of UK Lender MFS
FTSE 100 Reaches Fresh Record Highs as Major Share Buybacks and Earnings Lift London Stocks
So, what's happened is, I think, government policy, not just under Labour, but under the Conservatives as well, has driven a lot of small landlords out of business.
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
From fears of AI-fuelled unemployment to Big Tech's record investment, this is AI Weekly.
Apple just dropped iOS 26.4.
US Lawmakers Seek Briefing from UK Over Reported Encryption Order Directed at Apple
UK Business Secretary Calls on EU to Remove Trade Barriers Hindering Growth
Legal Pathways for Removing Prince Andrew from Britain’s Line of Succession Examined
PM Netanyahu welcome India PM Narendra Modi to Israel
Shadow Diplomacy: How Harry and Meghan’s Jordan Trip Undermines the Monarchy
Sir Jim Ratcliffe, co-owner of Manchester United, comments on immigration in the UK.
Bill Gates, the UN and the WEF are attempting to construct "a giant digital gulag for all of humanity" via digital ID, CBDCs and vaccine passport infrastructure.
Britain’s Channel Crisis: Paying Billions While the Boats Keep Coming
Downing Street’s Veteran Deception Scandal
UK HealthCare Expands ‘Food as Health’ Initiative Statewide to Tackle Chronic Illness in Kentucky
Leonardo Chief Says UK Set to Decide on New Medium Helicopter Programme
UK Slows Chagos Islands Agreement After Concerns Raised in Washington
European and UK Stock Markets Reach Fresh Highs as Banks and Miners Lead Rally
UK Government Insists Chagos Islands Negotiations Continue After Minister’s ‘Pause’ Remark
No Confirmed Deal for Engie to Acquire UK Power Networks Amid Market Speculation
UK Reaffirms Updated Entry Requirements for Travellers as of February 25, 2026
General Atlantic to sell equity stake in ByteDance, valuing the company at $550 billion
German Chancellor Friedrich Merz Secures Pledge from China for Greater Imports of Quality Goods
Lord Mandelson Condemns Arrest as Driven by ‘Baseless Suggestion’ He Would Flee Abroad
Former UK Ambassador Released on Bail Following Arrest in Epstein-Linked Investigation
UK Parliament Orders Release of Former Prince Andrew’s Government Vetting Files
Reddit Fined £14 Million by UK Regulator Over Failures in Age Verification Controls
UK Moves to Tighten Regulation of Netflix, Disney+ and Prime Video Under New Media Rules
British Woman Who Reported Rape in Hong Kong Faces Possible Prosecution
'Christianity is the religion that has made this country great.'
Man Receives Parking Ticket 38 Years After Offense: ‘City Officials Said It’s Legitimate’
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
UK Sanctions New Zealand Insurer Maritime Mutual Following Allegations Over Russian Oil Cover
Reform MP Danny Kruger Condemns UK’s ‘Unregulated Sexual Economy’ in Call for Tougher Controls
The Show Must Go On: Prince William and Kate Middleton Shine at the BAFTAs Amid Andrew’s Arrest
UK Sanctions Russian ‘Illicit Oil Traders’ After Email Blunder Exposes Sanctions Evasion Network
Russia Amplifies Baseless Claims That UK and France Plan to Arm Ukraine with Nuclear Weapons
UK Imposes Sanctions on Two Georgian Television Channels Over Alleged Russian Disinformation
×