New PM has made an encouraging start
Prime Minister’s Questions can be a daunting experience, even for the most seasoned operator, and Liz Truss acquitted herself well in her first outing yesterday since assuming office on Tuesday.
She was prepared to answer questions directly, rather than to dissemble, and to engage in a debate instead of just making a series of statements. Her manner is focused, business-like and far less flamboyant than that of her immediate predecessor.
For Sir Keir Starmer, the Labour leader, the experience was significantly different from his clashes with Boris Johnson, who rarely provided a steady target, and far less fractious. He found his key question, which was how the energy plan to be announced later today will be funded, answered directly: Labour wants another windfall tax on the oil and gas companies; Ms Truss was adamant that this would not happen. Both want to freeze prices; the issue is who pays. A detailed plan is to be revealed in the Commons, with the Prime Minister making the statement herself.
How this plays out in the country so early in her premiership could come to define it. Ms Truss’s instincts are against massive state intervention and yet the circumstances are such as to leave her with no option since millions of households would otherwise face an impossible winter. It is important that heating oil, on which many rural households rely, is to be included in the proposed freeze on bills. Businesses also need help. Many that survived the pandemic through various Treasury support schemes now face unsustainable increases in energy costs.
These are difficult times. The idea that yet more money is to be borrowed to pay for this package will be anathema to fiscal conservatives, but the alternative of a tax on the profits of energy companies is a disincentive to investment.
Opinion polls indicate that Labour’s windfall levy is popular, but Ms Truss is right to identify the flaws in this approach. Her declaration that we cannot tax our way to higher growth could have been uttered by the first woman prime minister 30 years ago.
Balancing short-term expediency with long-term economic requirements will require skill and determination. Ms Truss has set out her position and is clearly intent on sticking to her guns, even if the polls are tempting her to abandon them. It was an encouraging start.