The Tory spin machine cranked into overdrive overnight once it was clear they were losing both by-elections. Yesterday the Tories’ memo to Greg Hands ‘leaked’ (briefed) to Sky News showed the direction of travel – blame the “enormous discontent” on Nadine Dorries and simply pray for a miracle next year. They’re saying much the same this morning…

Generally pro-Sunak George Osborne summed up the reality for the Tories on his Political Currency podcast last night, just before polls closed:

“If [Labour] win Mid Bedfordshire, it’s really disastrous for the Conservatives. The Conservatives will think, well Tamworth was hard and the MP resigned under a cloud… if they’ve also lost Mid Bedfordshire, armageddon is coming for the Tory party…”

At the time of going to pixel, Rishi has yet to say a word…

Guido was struck by a strange sense of déjà vu whilst reading through the Chancellor’s speech to the CPS last night. Jeremy Hunt pledged to deliver “a dynamic, high growth future” and committed that “productivity will be at the heart of it.” Now where have we heard all of this before…

Productivity decreased by 1.4% in Q1 of 2023 compared to the previous quarter and it was down 0.6% on the same period of the previous year. Productivity now is at the same level as before the pandemic in 2019. Despite the fact that almost every Chancellor since 2010 has promised to improve it…

• In February 2022, Chancellor Rishi Sunak outlined three priorities, “capital, people and ideas” and promised “That’s how we’ll rejuvenate our national productivity”.
• In September 2019, Chancellor Sajid Javid proclaimed “we need to raise our productivity“.
• In November 2017, Chancellor Philip Hammond expanded the productivity investment fund to £31 billion, making the “battle to raise Britain’s productivity… the central mission of the Treasury“.
• In June 2017, Chancellor Philip Hammond pledged his “medium term focus would be productivity“.
• In November 2016, Chancellor Phillip Hammond used his Autumn Statement to  “prioritise additional high-value investment.. that will directly contribute to raising Britain’s productivity”.
• In July 2015, Chancellor George Osborne described productivity as “the great economic challenge we face”, before announcing the “Plan for Productivity“.
• In September 2013, Chancellor George Osborne said “the only sustainable way to raise living standards is to raise productivity“.
• In June 2010, Chancellor George Osborne used his first emergency budget to say “We cannot afford to continue” with productivity in decline.

First year economics undergraduates know that lower corporate taxation means more investment and, therefore, higher productivity. Moreover, empirical studies indicate a positive relationship between lower corporate tax rates and higher corporate investments. So why did Rishi hike corporation taxes if the government wants, as all Tory chancellors claim, to increase productivity? 

SW1 has spiralled into a frenzy overnight, as details from The Telegraph’s Lockdown Files continue to emerge. The investigation paints a poor picture of Matt Hancock’s pandemic handling, and was based on thousands of his WhatsApp messages, leaked to The Telegraph by Isabel Oakeshott. The headline finding is that in April 2020, Matt Hancock ignored the advice of Chris Witty to test all people entering care homes – saying it “muddies the waters”. It hardly seems like a “protective ring” around care homes…

The files also paint the picture of a Health Secretary more focussed on meeting his flagship testing target than securing the best outcomes. To quote the man himself, “I WANT TO MEET MY TARGET”. In addition to fudging the definition of tests, so that 28,000 extra could be counted before they were even delivered, Matt was focussed on securing publicity to boost demand. Naturally, this meant giving an exclusive to his mate and former boss in exchange for a front-page splash.

Matt and George’s chummy mutual media back-scratching didn’t end there. Matt initially had a go at George for a media round in which he criticised the government’s response to testing – which Osborne defended on the basis he was trying to “spread responsibility”.

The files also reveal that Hancock and Jacob Rees-Mogg enlisted Special Advisers to get a test couriered to Jacob’s child – at a time of national shortages. Matt’s positive outlook was also on show as he went further than minister Helen Whately, who said her 100-mile round trip for a test showed the system worked for some, by saying it was working “for MOST!”. The British public will no doubt be pleased to see their Health Ministers were focussing on the important things during a global health crisis. Such important issues as “ridiculous” Kay Burley “asking the same nonsensical Q again and again”…

Of course, Hancock’s camp isn’t happy with the revelations. They told Politico’s Playbook:

“Having not been approached in advance by the Telegraph, we have reviewed the messages overnight. The Telegraph intentionally excluded reference to a meeting with the testing team from the WhatsApp. This is critical, because Matt was supportive of Chris Whitty’s advice, held a meeting on its deliverability, told it wasn’t deliverable, and insisted on testing all those who came from hospitals. The Telegraph have been informed that their headline is wrong”.

Sources close to him add Oakeshott broke an NDA and Matt is “considering all options”…

The TaxPayers’ Alliance dynamic tax model suggests the planned 6% increase in corporation tax from the current rate of 19% to 25% could cost £30.2 billion of lost GDP after a decade. Investment would be £11.9 billion higher after ten years if the rise was cancelled, highlighted by AstraZeneca’s announcement of a new manufacturing plant in low-tax Ireland rather than the UK.

The founder of the Conservative Growth Group of MPs, Ranil Jayawardena, says the modelling shows that scrapping the rise would “create jobs, encourage investment and help pay for itself.” Even more surprising are reports that former chancellors George Osborne, Philip Hammond and Kwasi Kwarteng all think the hike proposed for a little over a month’s time is a mistake.

Ahead of Jeremy Hunt’s first Spring Budget on March 15, the three former chancellors have separately chimed in. Hammond told the Telegraph “My view on corporation tax is always that it’s better to have lower than higher. I am quite disappointed that we will be increasing it to 25%.”

George Osborne highlighted the AstraZeneca decision when he told the BBC:

“The reason I reduced business taxes was to attract investment and attract research and attract companies like AstraZeneca, and if you put up taxes then you will potentially have the opposite effect. I reduced business tax because I thought that was a way of bringing investment in. That creates the revenues that allow you to fund your public services. That’s the approach I took and would be the approach I would take again.”

Kwasi Kwarteng says increasing corporation tax “doesn’t help our competitiveness”, adding: “We have got to look at ways to improve our attractiveness to foreign investors.”

The OBR’s forecast coming in as out by £30 billion versus the real world data released last week means there is room to reverse the corporation tax hike. Sunak and Hunt have no mandate to raise taxes and they are being rhetorically outflanked by Labour on tax-cutting. A ridiculous situation for Conservatives who claim to be low tax Tories…

While George Osborne was busy negotiating a giveaway of the Parthenon marbles, it appears he’d have been better placed adverting strikes by union workers at the British Museum.

This picket keeps getting bigger and bigger 💪 #PCSonstrike pic.twitter.com/bOLVHwfTXl

— PCS Culture Group (@PCSCultureGroup) February 1, 2023

While his workers strike, wealthy George Osborne was unfortunately spotted on the Central Line by a left winger this morning who leapt at the opportunity to confront him face-to-face about his record on austerity. He may have rehabilitated his reputation among the liberal commentariat, less so with hard-left wingers…

Fatima claims she said “f**k you” to the former chancellor while he “pretended that he didn’t see [her]”. At least the government have ministerial cars…

In a sign that Liz Truss’s war on Treasury orthodoxy has been completely lost, Guido hears that Jeremy Hunt, Scrooge-like, is now receiving visits from the ghosts of Treasury past. This morning, eyebrows were raised when George Osborne was spotted entering Downing Street. Far from George being the surprise pick for Rishi’s new ethics commissioner, Guido understands George had popped in for a meeting with Jeremy Hunt. Who better placed to give advice on a new austerity drive?

It doesn’t end there. Guido learns Hunt has been keen to talk to all his recent predecessors, including Philip Hammond and Sajid Javid – and, presumably, Rishi – as he scrambles to put together the November statement. Presumably Kwasi Kwarteng is not high up on Jeremy’s priority meetings list…