11 July 2022

A zeal for tax cuts is already defining the Tory leadership race

As more of his rivals launch their campaigns, Rishi Sunak is emerging as a lone voice in favour of recent tax hikes.

Illustration by Matt Kenyon / Ikon Images

And they’re off. The contest to be the next leader of the Conservative Party and the prime minister of the United Kingdom is under way. Candidates have spent the weekend courting their colleagues while trying to outbid each other on the size of their tax cuts.

Rishi Sunak is the current front-runner (see today’s chart). But the field remains wide open; big hitters are only now launching their campaigns. Liz Truss gets hers started in the Daily Telegraph this morning with a pledge to cut taxes from “day one”. (For more on her bid to become prime minister, see our in-depth profile of Truss, in which Martin Fletcher looks back on her career and assesses her chances). Meanwhile, Jeremy Hunt has resurrected his 2019 leadership campaign. Watch out, too, for heavyweight endorsements: Michael Gove came out for Kemi Badenoch last night while the influential leader of the Northern Research Group, Jake Berry, endorsed Tom Tugendhat.

There is little discussion so far of issues such as inflation, climate change, the cost of living, levelling up, to name a few. Instead, candidates are veering to the right. Most are in favour of overriding the Northern Ireland protocol and deporting asylum seekers to Rwanda. Most are promising widespread tax cuts. Sajid Javid, for instance, wants to cut corporation tax from 19 per cent to 15 per cent. The Chancellor, Nadhim Zahawi, has said he’d cut each government department’s spending by 20 per cent. These are wild promises, with little detail as to how they would be implemented. Candidates are desperately trying to distinguish themselves in a crowded field. There’s a divide emerging between Sunak’s commitment to keeping debt down (and therefore keeping taxes high) and most other candidates’ zeal for cuts.

These wild promises won’t be deeply scrutinised because Tory MPs will expedite the contest to get Boris Johnson out of No 10 as soon as possible. Be warned: this is going to move very quickly. One MP, with influence over the rules, told me the plan is to whittle the list down to two by 21 July. That gives Tory MPs two weeks to scrutinise the candidates and decide which pair will be presented to the wider party membership, who will then vote to choose the new prime minister. To do this, they suggested the threshold to get on the ballot may be increased from eight to 25 nominations from fellow MPs. The election of the 1922 Committee’s executive takes place this afternoon. And the rules of the contest should be announced soon afterwards.

Throughout all of this, Labour will hope to cement its lead in the polls. There are two main problems for Labour. First, the leadership election will distract from Labour’s policy announcements over the summer. Labour already struggles to get media attention and that might get worse. Second, the loss of the disgraced Johnson removes a key electoral asset for Labour. The question is to what extent the new leader will inherit Johnson’s unpopularity and whether Labour can mar the Tory party alongside the PM. On Friday, Starmer was bolstered by the news that he will not receive a fine for the “beergate” gathering in Durham during lockdown in April 2021. That will shore up his position within the party and the shadow cabinet. Starmer is all but guaranteed to lead Labour into the next general; we will soon know who his opponent will be.

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