The first thing to realise about the final two contenders to be Conservative party leader and, therefore, prime minister, is that they are campaigning not to win a general election but to win the votes of an electorate that is now basically Ukip with a blue rosette.
The party’s membership is largely male (63%), pale (97% white) and stale
(39% are 65 or over). They are also true beLeavers: of the reported 170,000
Tory members (around 10,000 more than in 2019) who will be able to vote, some 60,000 joined during the Brexit wars, eager to support a party pledging to get it done.
Rishi Sunak and Liz Truss know this only too well, and it does seem to give
Truss a distinct edge. Even though she is a former Lib Dem and anti-monarchist who campaigned to remain in the EU, there is more joy in the Tory party over one sinner that repenteth than over 99 previous Brexit supporters.
Truss is a careerist who will switch positions with the wind and she is also a cakeist in the manner of Boris Johnson. No wonder she is the favourite with a constituency that seems to believe Johnson did little to deserve his defenestration.
“Chaotic and eccentric” according to Sam Freedman, who worked with her at education, she is the natural heir to the departing, disgraced Johnson and
has inherited from him the ability to make wild, uncosted pronouncements
with cynical abandon. This has allowed her to turn two areas in which Sunak should be strong – Europe and economics – to her advantage.
Sunak was chancellor of the exchequer and has, therefore, seen the books. This would normally be seen as a good thing, but it now means he knows there is no money for tax cuts. If there were, he would have cut taxes by now rather than increasing them.
He is also lumbered with the fact that he has increased tax on payrolls by introducing much higher National Insurance rates and freezing tax bands, while announcing an increase in corporation tax from 18% to 25%. He has taken the overall tax burden to a 70-year high.
Sunak’s claim that he is, at heart, a tax-cutting chancellor is contradicted by the facts. He is, therefore, limited to promising to cut taxes when it is prudent to do so and inflation is under control. This is actually a sensible
policy, supported by the vast majority of economists, but for Sunak it is a
It leaves him with far fewer options, so he is talking about a bonfire of EU
red tape and also about increasing investment and overhauling apprenticeships.
None of that is likely to light many people’s fire and Truss is taking full advantage. She has attacked 20 years of low growth (ignoring that 12 of those years were under her Conservative government), called tax rises “Rishi Sunak’s policy” and questioned the mandate of the Bank of England to fight inflation. Apparently, she wants to include a growth element in its target as well.
Truss also has the distinct advantage of being foreign secretary, enabling her to be abroad when Johnson was defenestrated and to claim none of the government’s economic policies were her idea – not exactly collective responsibility, but a clever trick if you can pull it off.
She can also promise to cut taxes at will in a manner that would destroy any shadow chancellor. So far, she has promised that on her first day in No 10, she will reverse the increases in National Insurance and income tax that Sunak introduced to help the NHS, scrap those plans to raise corporation tax
and temporarily abolish green levies on energy bills.
All of this would cost the Treasury around £30bn to £34bn but, according to the foreign secretary, this can all be paid for within the current “fiscal envelope”. That means she can find £30bn without raising taxes or borrowing more than promised. The government doubtless has some money held back in reserve for a small tax cut just before a general election, but Truss will empty the bank account and more in one go if she is elected.
Where she thinks she is going to find £30bn in spending cuts, the only other option, is unclear. Not least because she told the Times that she had no intention of returning to austerity. She even claimed previous “cuts to public spending… weren’t sustainable. I will not allow that to happen”. She is also promising a huge increase in defence spending, costing another £24bn.
This is, of course, pure, unadulterated “cakeism”. Lower taxes, less borrowing and higher spending – she has learned well at the feet of a master.
Her audience swallowed the line long ago that all tax cuts pay for themselves with higher economic growth. That lets Truss claim that she can find the money for the NHS from the extra revenue the tax cuts will create, and get away with it – at least until she is safely in No 10. Such fantasy economics is now par for the course among Brexit ultras, so she is unlikely to be challenged on this.
On Europe, Sunak has the right to be even more bemused. He is a Brexiteer and always has been. He campaigned to leave the EU and despite his time at
the Treasury watching the economic damage leaving has brought, has stayed true to the cause.
But he finds himself outmanoeuvred by someone who not only used to be a
Lib Dem but also campaigned for remaining in the bloc. His trouble is that he has blotted his copybook by trying to be sensible – always a failing in today’s Tory party.
The best example of this is that although he says he backs the Northern Ireland Protocol bill, which will start an immense row with the EU, he is seen as less likely to actually use it to start a fight.
But the proposer of the bill is one L Truss and she not only backs it wholeheartedly but is seen as perfectly willing to go for the nuclear option.
Truss’s bill, which breaks international law and tears up a treaty she and the government negotiated, signed and won an election on, has already led to legal proceedings against the UK by the EU (it launched another four actions last week over non-implementation of aspects of the protocol), with the potential for far more to follow.
This is just the start of endless, bitter disputes between London and Brussels, which, if the UK does not back down, will quite possibly lead to a trade war.
It could easily result in the complete destruction of not only the Northern
Ireland Protocol but also the Trade and Cooperation Agreement itself. The
UK would be out in the cold, with the hardest of hard Brexits, trading on WTO terms. The economic and reputational damage would be immense and long-lasting.
Amazingly all of this is seen by members as a good reason to back Truss, which says a great deal about the state of the party. Common sense and realism have been trumped by law-breaking and self-harm.
As a result, Truss is riding high. Threatening to make Brexit worse is a sure-fire winner with Tory members these days. When it was recently pointed out that for the EU and many European states Truss is almost persona non grata, this was portrayed as giving her a huge advantage in the race – the logic being that the EU must think that way because it is frightened of her as she will hold its feet to the fire and extract those concessions all Brexiteers know are there for the taking.
The fact that the EU and its member states dislike her because she is considered to be untrustworthy, nasty, two-faced and willing to bring down not just the Northern Ireland Protocol but also the Trade and Cooperation
Agreement, is by the by.
Sunak cannot compete with this level of madness – he at least has some common sense. Don’t get me wrong, he was a terrible chancellor of the
exchequer, but he does know better than to play with matches near the petrol pump.
Like her predecessor, Truss doesn’t care what damage she does to get into No 10 and seems perfectly willing to do even more when elected. But even if she wins there is one thing she won’t be able to do and that is back down or even change her mind. Her party, and especially its Brexiteer majority, expect massive tax cuts and a knife fight with the EU and they think Truss is the person to give them both. She knows that if she disappoints them, they will find another stooge – so she won’t.
It is wishful thinking when Boris Johnson tells his aides that he will be back inside No 10 within a year. But if Truss wins, in a very real sense, he will be back already.