Tories must restore economic credibility to win election as Hunt rejects calls for tax cuts

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At a drinks party in Downing Street a few weeks after he took over as chancellor last year, Jeremy Hunt told his guests: “Sometimes doing the popular thing isn’t the right thing.”Ever since he was handed the keys to the Treasury, first by Liz Truss and then Rishi Sunak, Hunt’s overwhelming priority has been to restore the Tories’ reputation for economic competence.As a result, he has rejected calls from Tory backbenchers for tax cuts, from the unions for decent public sector pay rises, and from the armed forces for a £10bn increase in defence spending.Some Tory MPs – particularly those who won seats in 2019 – are unhappy, voicing fears of a return to Osborne-style spending restraint when their constituents need better-funded public services and an indication that levelling up is more than just a slogan.However, government insiders insist Hunt won’t err from his conclusion: that voters will have more money in their pockets if inflation comes down, and there won’t be any more cash for big spending commitments unless growth is boosted to pay for it.Both the chancellor and Sunak understand that, for the Tories, there is only a very narrow path to winning the next election.

It all revolves around the economy. If they can persuade the public they would be better guardians than Labour, they still have a chance.It could be an uphill struggle.

JL Partners became the latest pollster this week to find that Labour had taken the lead from the Tories on the economy, with a five-point advantage, while other pollsters have been suggesting that for months.

It’s a dramatically different picture to the double-digit lead the Tories held on the issue in 2020-21.Hunt tried his best to put a positive spin on the economic picture in Wednesday’s

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