Is Sunak really a big state believer?

12 July 2022

3:30 PM

12 July 2022

3:30 PM

There’s something strange happening in Tory politics. It’s not surprising to see leadership candidates taking special aim at the current frontrunner Rishi Sunak. But the attacks being used are redefining the economic philosophy of the Tory party in a way that could soon backfire, regardless of who wins the top job.

Take, for example, Liz Truss’s most recent pitch to MPs: get behind one Tory right candidate or risk sending Sunak into No. 10. Allies of Suella Braverman are reported to be making a similar pitch. The vast number of candidates in this race has indeed caused a lot of uncertainty and increases the likelihood of surprise results – something leadership hopefuls are desperate to avoid. But to the main point: since when is Sunak on the Tory left?

The headline tax burden makes being on the left an easy accusation to throw Sunak’s way – but it’s a deliberately simplistic narrative. Sunak spent the majority of his time as chancellor reminding his fellow MPs – not to mention the Prime Minister – that all the new day-to-day spending they wanted needed to be accounted for: with spending cuts, growth policies, or as the least desirable option, tax rises. Boris Johnson consistently ruled the first two options out, terrified to be labelled with the badge of austerity and also terrified to rock the boat within his own party when it came to policy reform, especially around housing and planning.

So we got tax rises, not because they were desired, but because more spending was demanded from the PM and Sunak refused to borrow to deliver it.

Sounds like a fairly Tory stance, at least in normal times. Sunak’s philosophy is about as Thatcherite as get gets. As chancellor he tried to follow Nigel Lawson’s playbook to a tee: raise taxes to deal with the threat of inflation and rising rates, then propose trimming the state to allow for serious tax cuts.

That latter bit was not an option so long as Johnson remained in No. 10. And the battle for Sunak now will be convincing his fellow MPs and Tory voters that the PM was the real barrier to responsible tax cuts, not Sunak himself. This will be an uphill battle, as it will involve not simply presenting a credible plan for cutting taxes soon, but also building up trust in parliament and across the country that he is the MP who can deliver it.

But it’s strange that to cost your tax policies now falls into the category of being on the left, while promises to slash major taxes without saying how it will be funded is a characteristic of the right.

It suggests Johnson has put a much bigger stamp on the party than many MPs will want to admit: his economic policy of having it all has proved rather appealing to a lot of Tories who were quietly ecstatic about the discovery of the magic money tree during the pandemic.

Plenty of MPs want to keep picking from it. You can understand why: it allows for far more lofty promises around tax cuts and giveaways. But it doesn’t make it right.

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