Throughout the Conservative leadership contest, Rishi Sunak has made a virtue of his economic policy which seeks to get a grip on inflation. Sunak claims that tax cuts would have inflationary consequences and cause interest rates to rise, something he is unwilling to risk no matter however politically inconvenient that might be.
It was a surprise to many waking up today to read that Sunak has announced that if elected Conservative Party leader and Prime Minister he will temporarily cut VAT on energy bills which will save the average household £160 per year. This pledge is not too dissimilar to Liz Truss’ moratorium on ‘green levies’ which will bring about a reduction in energy bills of £150.
No matter how laudable Sunak’s new position is, his change of tack smacks of panic after 4 televised debates in which he derided Truss’ pledge to cut taxes as ‘immoral’ and fantasy economics. Post-debate polls consistently show that Truss is ahead of Sunak with the Conservative Party membership. After the BBC head-to-head debate on Monday, the pollster YouGov asked Conservative Party Members who they thought had performed better with 50% saying Truss and 39% saying Sunak. With ballot papers being sent to Tory members next week, Sunak is running out of time.
Sunak’s emotional attacks on Truss’ economic position may stem from the fact he is well aware that he was behind with Conservative Party Members and had to do something to move the dial. Whether Sunak is panicking or not, his campaign has shown that he lacks political judgement for the following two reasons:
Firstly, throughout the Conservative leadership contest Sunak has been speaking over the Conservative Party membership to the wider electorate. His strategy has been to demonstrate that he is more electable than Truss and better placed to beat Labour at the next election. Polls suggest this strategy is not paying off with a snap poll of the general electorate from Opinium after the BBC debate placing Sunak and Truss at 38% and 37% respectively. Unless he can win over Conservative Party Members his wider appeal is academic.
Secondly, polls are showing that a quality the electorate is looking for most in a Prime Minister is integrity. Deriding a rival’s tax cutting position as immoral and then announcing your own does not signal strong moral principles. It also shows a lack of consistency for Sunak said in February this year that cutting VAT on energy bills was not the right approach as it would disproportionately benefit wealthier households, with VAT a tax on consumption. Moreover, not only has he refused to cut taxes until now, he is putting them up, with corporation tax increasing from 19% to 25% next financial year. Sunak would have been better off sticking to his guns for he now looks like he will say and do anything if it will get him where he wants to be. Remind you of anyone?
In contrast to Sunak’s campaign, Truss has been on message throughout and has spoken directly to the Conservative Party Members, the very people who will determine the outcome of this contest. Discipline in politics cannot be underestimated and in announcing the new tax cut today, Sunak has undermined himself.
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