Sunak in £4billion
He lines up eye-catching policy pledge... but as chancellor he’d blocked Boris’s plan to do same
RISHI Sunak makes a desperate bid to claw back lost ground in the Tory leadership race today by promising a £4billion VAT cut on energy bills.
The former chancellor has repeatedly refused to match rival Liz Truss on cutting taxes.
He has labelled her plans a ‘fairytale’ and insisted such cuts must wait until inflation is curbed.
But today he pledges to scrap the 5 per cent VAT rate levied on domestic energy bills for a year.
Last night No10 insiders told the Daily Mail that this plan was something Boris Johnson tried to implement to ease the burden on consumers – but was blocked by Mr Sunak.
‘Boris begged him to do it – but he wouldn’t budge’, said the source. ‘It’s astonishing that he’s now claiming it as his own policy.’
Mr Sunak’s U-turn came after he told a BBC debate on Monday that he would ‘wait to see what happens’ to the cost of electricity and gas before acting.
And it follows a dramatic second debate between the Tory leadership hopefuls last night as the presenter Kate McCann fainted.
The Foreign Secretary looked visibly worried and could be heard saying ‘oh my god’ as she rushed to help Miss McCann.
The Talk TV broadcast immediately went off-air, with a message appearing on the screen that read: ‘We are sorry for the disruption to this programme.’
Mr Sunak’s energy bill tax move, which would save an average household £160, has been Labour Party policy for nearly a year, and Mr Sunak voted against the proposal in the Commons in January.
He told the Commons in February that the policy would ‘disproportionately benefit wealthier households’.
He added: ‘This would become a permanent £2.5billion Government subsidy... when we are trying to rebuild the public finances.’
This month he argued that tax cuts are ‘immoral because there is nothing noble or good about wrecking up bills on the country’s credit card that we then pass on to our children and grandchildren’.
But he has now been forced into a U-turn by a lacklustre showing at Monday night’s televised BBC debate, where he was accused by a fellow Tory MP of being ‘ very aggressive’ towards Miss Truss, and poor polling figures.
A YouGov survey of Conservative members, who will receive their ballot papers next week, put Miss Truss on 62 per cent and Mr Sunak on just 38 per cent.
The former banker has been outflanked on fiscal policy by Miss Truss’s promise to disrupt economic orthodoxy and deliver £30billion plus of tax cuts.
Until yesterday Mr Sunak had refused to consider tax cuts before autumn 2023, the earliest point when a 1p cut in the basic rate of income tax could come in.
A source close to the Liz Truss campaign said: ‘It’s good that Rishi has finally woken up and decided to offer something to people struggling with the rising cost of living. However, this feels like a screeching U-turn.’
Yesterday MPs on the Commons business committee said in a report that fresh price rises had rendered his May 2022 support package ‘insufficient’ and warned of a ‘serious crisis’ this winter.
A spike in wholesale energy prices, exacerbated by the war in Ukraine, has pushed average energy prices from £1,138 last year to an estimated £3,244 from October. The Treasury has so far handed £400 to all households, rising to £1,200 for the poorest families.
Pat McFadden, Labour’s Treasury spokesman, said Mr Sunak had attacked the VAT cut policy ‘for months’ before finally adopting it.
The pace and timing of tax cuts has taken centre stage in the heated battle for the keys to Number 10.
Miss Truss has promised to scrap the recently-introduced national insurance hike, saving workers on the average UK salary £164 per year, and freeze green levies for a year, saving households £153.
It came as European gas prices surged another 20 per cent as Russia cut supplies in its attempts to weaponise energy supplies.
Michael Lewis, chief executive of energy giant E.on, yesterday called for more government help for the
‘Boris begged him to do it’
poorest families this winter, saying: ‘The kind of increases we’re seeing now are unprecedented in my 30 years in the energy industry.’
Labour’s Darren Jones, chairman of the business committee, said: ‘Many families on low incomes have been put in heart-breaking situations. This winter you’re going to have more parents not feeding themselves, so they can feed their kids.’
Analysis of the two candidates’ tax policies by the Resolution Foundation found the poorest households will hardly benefit from Liz Truss’s national insurance tax cut. Just 15 per cent of the £13billion annual cost of scrapping the levy would go to the poorer half of the population, it found.
Mr Sunak and Miss Truss traded blows over their rival tax plans in their second TV showdown last
night, with both candidates branding the other’s approach as ‘morally wrong’.
But the debate was noticeably less aggressive than the previous evening when the pair had exchanged insults in a debate on BBC One.
Asked at the start of the programme if he would like to put a question to Miss Truss, Mr Sunak opted to ask ‘how she was spending her birthday’ – Miss Truss turned 47 yesterday.
Part-way through the debate a loud crash could be heard in the studio and Talk TV last night confirmed political editor Miss McCann had fainted. ‘ Although she is fine, the medical advice was that we shouldn’t continue with the debate,’ it said in a statement.
She had been due to present alongside The Sun’s political editor Harry Cole, but he has Covid and had to pull out.