Is Rishi’s latest tax pledge a U-turn?

Is Rishi Sunak spooked? Today’s big tax announcement – his plan to temporarily slash VAT on energy bills this winter should he become Prime Minister, saving the average household £160 – is being viewed as a U-turn. This comes after the former chancellor used the first four leadership debates to double down on the importance of fiscal responsibility and not rushing tax cuts. With Sunak behind Liz Truss in the Tory membership polls by a ratio of roughly two-to-one, is this a desperate bid to improve his standing with grassroots voters? Or is something else going on?

Whenever the cost-of-living crisis comes up, Sunak – on paper – has the upper hand. As chancellor, he was responsible for two major support packages this year, worth £9 billion and £15 billion respectively. The latter ensured the eight million most vulnerable households received £1,200 in subsidies, largely offsetting energy bill price hikes. It’s a sign of the times – and mindsets created around pandemic spending – that citing this support as evidence he will act if prices spike again has not convinced the membership he has a plan of action for winter.