2023 brings more political pain for Sunak’s government

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Good morning, and happy new year. Good news! Arsenal might win the league. Bad news! Almost everything else is bad, and also Arsenal probably won’t in fact, win the league. Some thoughts on the politics of the bleak outlook below.

Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb and please send gossip, thoughts and feedback to insidepolitics@ft.com.

It’s a new year, and I’m feeling . . . grim

We start 2023 as we ended 2022: with a lot of alarming charts. The UK will face one of the deepest recessions and the weakest recoveries: that’s the grim consensus from the Financial Times’s annual economists’ survey (you can read the write-up here and the full responses here).

As is also customary, FT journalists have been asked to make some predictions about the coming year. They are all worth reading, but there are two in particular that are worth noting from a UK perspective.

The first is from Tony Barber, our European comment editor who writes the Saturday edition of the Europe Express newsletter. He predicts a “continued, grinding conflict” between Russia and Ukraine:

Conditions for a lasting ceasefire, let alone a formal peace settlement, are unlikely to be met in 2023. Freezing present positions would satisfy neither Russia nor Ukraine. Vladimir Putin’s Kremlin would not have broken Ukraine’s independence, or even fully control the four regions it “annexed” in September. President Volodymyr Zelenskyy cannot accept a ceasefire leaving Ukraine without the territory lost since Russia’s invasion in February, on top of occupied Donbas and Crimea, seized in 2014. Regaining that territory would require weaponry the west seems unwilling to supply. Russia is trying to regroup and is preparing its people for a long war. A continued, grinding conflict is most likely.

While FT energy editor David Sheppard predicts blackouts in Europe:

It could happen before April if the weather is cold enough, but next winter is the bigger challenge. Though gas storage sites are now close to full, refilling them in the spring will be tough. In 2022, Russian gas flows were largely intact until June; in 2023 they will be close to zero. Liquefied natural gas will struggle to cover the shortfall. Offsetting the risk is Europe’s backwards shift from gas to coal. France’s nuclear plants should have fewer maintenance issues. But the energy system has been straining for 18 months. The risk of something breaking is increasing.

Added to that, don’t forget that while Rishi Sunak and Jeremy Hunt might have removed much of Liz Truss’s “moron premium” as far as UK government borrowing costs are concerned, they haven’t been able to exorcise it from the UK more broadly, and the mortgage market in particular. (Chris Giles has written a good piece on how British homeowners are still paying the price of Truss’s regime, while, as Oliver Barnes explains, the picture is no better for renters.)

I’m going to go out on a limb here and say that if the UK faces a deeper and worse recession than its peers, if there are mounting pressures in UK housing, if there are blackouts, and if the war in Ukraine continues (even in the case of ceasefire, I don’t think there is any plausible account that leads to a return to prewar energy prices any time soon) then that is going to be painful for households and politically painful for the government, too.

That would be a problem even if people were inclined to give the government the benefit of the doubt for the situation it faces. The biggest political consequence of Liz Truss’s 49-day premiership, in my view, is that it has also increased the share of the blame that British voters assign to the Conservatives for various crises facing the UK, and decreased the amount they blame on global forces.

Taken together, my assumption is that this will be a year, when, yes, there will be the occasional eruption at Westminster over various issues that Labour might struggle to address. But given that it is still very far from an election, I don’t expect those to crystallise into polling difficulties for the Labour party. We might look back at some small row this year as a defeat foretold when the election eventually rolls around in the late winter of 2024. But this year? No, I think this year will be a very difficult one for the government.

Now try this

A happy bit of news to start 2023 with: the composer Max Richter is this week’s Composer of the Week on Radio 3.

Top stories today

• A&E waits ‘appalling’ | Senior doctors on Monday said the pressures facing the NHS were “intolerable and unsustainable”, with some of the UK’s accident and emergency departments at crisis point, as the government stressed that reducing pressure on the health service was its “top priority”.

• Strikes resume | About 40,000 RMT members will stage walkouts on Tuesday, Wednesday, Friday and Saturday, in a dispute over pay, job security and changes to working practices. Train drivers represented by the Aslef union will walk out on Thursday in a row over pay.

• Cash boost | Millions of low-income households in Britain will receive payments totalling up to £1,350 spread over at least 12 months, the government announced on Tuesday as part of its measures aimed at easing the cost of living crisis.

• £700mn for ‘left behind’ areas | The UK government is expected to launch a £700mn fund early this year that will provide long-term cash to rebuild some of the most deprived parts of Britain, as it looks to bolster its levelling-up policy.

• Bid to bail out British Steel | Jeremy Hunt, the chancellor, is considering whether to launch a taxpayer rescue of British Steel’s two blast furnaces, whose closure would inflict a strategic blow to the UK economy and cause heavy job losses.