OPINION - Liz Truss: It’s tax cuts vs ‘Gordon Brown economics’

·3-min read
 (West End Final)
(West End Final)

This Conservative leadership contest is getting weirder. It started out straightforwardly enough. Rishi Sunak was the MPs’ favourite (though at no stage did he command anything approaching majority support) with a pitch based on ‘sound money’ and tax cuts soon but not now.

At the other end of the spectrum was underdog Liz Truss, who slowly but surely cannibalised the Tory right vote to sneak past Penny Mordaunt and onto the membership ballot. She is now the clear favourite according to the polls.

But as the soaring cost of energy has come to dominate the summer, something strange is happening. Sunak and his proxies are going all-in on cash support for households. Truss on the other hand seems to be sticking to tax cuts. Or maybe not.

Today, in an exclusive interview with the Standard, the foreign secretary ruled out what she described as “Gordon Brown-style handouts” to ease the squeeze on people’s finances as energy bills and inflation continue to climb.

However, she said she was prepared to offer further support via an emergency Budget if she wins the leadership election, telling Deputy Political Editor David Bond:

“I can assure you that I will do all I can to help households across Britain. I understand how difficult the circumstances are... that people are facing pressure on food bills and fuel bills and with the cost of living.

At the same time, chief secretary Simon Clarke, a key Truss ally, revealed that the government was “working up a package of cost of living support that the next Prime Minister can consider when they take office.”

Of course, when it comes to policy, details matter. How you target support is often as critical as the decision of whether to provide it in the first place.

For example, those who do not earn enough to pay income tax will by definition not benefit from an income tax cut. Similarly, people who do not drive will gain less from fuel duty relief. Pensioners meanwhile are often affected differently from those in the workforce.

Given her poll lead, and last week’s volte-face on regional public sector pay, it is hardly surprising that Truss is not providing specific policies on how she will counter the cost of living crisis, and annual energy bills of more than £4,000 a year.

But millions will be sweating the details. Research from the Child Poverty Action Group suggests that by January 2023, more than half of households in the UK – 15 million people – will be living in fuel poverty, which they define as spending more than 10 per cent of net income on energy.

If Truss wins this contest, attention will swiftly turn not simply to whether help is on the way, but how, and for whom. In other words, the business of governing.

In the comment pages, Rohan Silva’s business got hammered by Covid. Now, he can’t sleep more than a few hours without getting up to pee. It comes together nicely on the page.

While Business Editor Jonathan Prynn, who is always excellent company at the desk next to mine, says City office ‘bants’ must become a thing of the past.

And finally, first time? Inside Naked, Soho’s new, (very) NSFW opening. David Ellis and Clare Finney take their dates to see if it’s hot or not. The pictures are quite stressful.

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