Sunak accused of ‘screeching U-turn’ by Truss campaign after proposing cutting VAT on fuel bills – UK politics live

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IFS says cutting VAT on fuel bills move ‘in exactly wrong direction’ if allowed to become permanent

The Institute for Fiscal Studies has published a short briefing on Rishi Sunak’s proposal for a temporary cut in VAT on fuel bills. Sunak says he would cut scrap VAT on all domestic fuel bills for just one year. The IFS says this would cost about £4.3bn.

It says this policy would be “well targeted at those who face the biggest rise in their energy bills, but not at those – the poorest – who are least able to cope with the rise in costs”. It also says it would have a slight inflationary impact, because householders would have more money to spend on other items.

But the IFS’s main concern with the policy is that it would be hard to reverse, and that, if the cut became permanent, that would be a mistake. It says:

If it were genuinely temporary, the fiscal and environmental costs of the policy would be bearable. The biggest risk with the policy is that it would prove politically difficult to restore VAT on energy bills at the end of the 12 months. As a permanent policy, removing VAT on energy bills would be a move in exactly the wrong direction: distorting households’ choices towards more energy use, making it harder to meet the UK’s ‘net zero’ targets and meaning that any reduction in emissions happened in a way that was more costly overall to households than it need be.

Truss says new offence of street harassment, blocked by Johnson, would be created if she becomes PM

Liz Truss has said that if she becomes prime minister she will create a new offence of street harassment to protect women.

Priti Patel, the home secretary, favoured the creation of a new offence in the wake of the murder of Sarah Everard, which triggered a national debate about violence against women, but the plan was reportedly blocked by Boris Johnson.

In a BBC podcast in May, Nimco Ali, who is a very close friend of Johnson’s wife, Carrie, and who was appointed as the UK government’s independent adviser on tackling violence against women and girls, all but confirmed that it was Johnson who vetoed the plan. Johnson has argued that harassment can be tackled through existing legislation.

As well as announcing her plan for a new offence to criminalise street harassment, Truss said she would introduce a national domestic abuse register, covering all forms of domestic abuse, including coercive and controlling behaviour, and financial abuse.

And she said there would be compulsory training for police officers in handling domestic abuse crimes. She said:

Over the last two years, our nation has been shocked by a number of high-profile murders of women, many here in London. It is the responsibility of all political leaders, including us in Westminster and the mayor of London, to do more.

Violence against women and girls doesn’t have to be inevitable. Women should be able to walk the streets without fear of harm and perpetrators must expect to be punished.

Through increased police training, new offences, faster processes for rape victims and our domestic abuse register, we will ensure victims are protected, and crimes are prevented in the first place.

Liz Truss, the foreign secretary and frontrunner in the Tory leadership contest, has said she would order the police to cut homicide, serious violence and neighbourhood crime by 20% from 2019 levels by the end of this parliament. Danny Shaw, the former BBC home affairs correspondent, says such a generalised target is unrealistic.

A word about police targets to cut crime.

Targets can be effective if they’re specific & based on proper analysis, challenging but achievable. They can galvanise action & focus minds.

BUT they are not effective if a figure is plucked from the air & applied across the board…

— Danny Shaw (@DannyShawNews) July 27, 2022

A word about police targets to cut crime.

Targets can be effective if they’re specific & based on proper analysis, challenging but achievable. They can galvanise action & focus minds.

BUT they are not effective if a figure is plucked from the air & applied across the board…

— Danny Shaw (@DannyShawNews) July 27, 2022

By pinning such crime targets on police, it is sending a message that police alone are responsible for crime levels – a naive view.

There is a wide range of factors affecting homicide rates & other crimes, many of which police have no control over…

— Danny Shaw (@DannyShawNews) July 27, 2022

Police forces are already subject to scrutiny – by elected police & crime commissioners & @HMICFRS

HMIC grades forces according to performance, allowing, in effect, league tables to be created. So I’m not sure what value an extra set of tables, as Truss suggests, would deliver.

— Danny Shaw (@DannyShawNews) July 27, 2022

This is from ITV’s Anushka Asthana, who has dug out what Rishi Sunak said in the Commons in February when he explained why he was opposed to calls (from Labour, and some Tory MPs too) for a cut in VAT on fuel bills.

Rishi Sunak cd argue that cutting VAT on energy bills is not inflationary- so not against the main thrust of his economic argument but prob is what he said in the Commons in Feb- it would disproportionately help wealthiest, companies would NOT pass & would never be a one off 👇 pic.twitter.com/Nd3t3NrRHd

— Anushka Asthana (@AnushkaAsthana) July 27, 2022

My colleague Geneva Abdul is covering today’s rail strike on a separate liveblog. It’s here:

As Geneva reports on her blog, several Labour MPs have been joining RMT members on picket lines this moning. Jeremy Corbyn, the former leader, is not technically a Labour MP at the moment (the whip has been suspended over his response to the EHRC report into antisemitism), but he has been on a picket line too, at Euston station.

Corbyn told PA Media that Labour MPs supporting the RMT were “doing the right thing by being there with the workers in dispute”. He also said: “The degree of poverty pay within the rail industry is huge, and now the levels of job insecurity have grown as well.”

Yesterday Keir Starmer explained why he was opposed to his frontbenchers being on picket lines. He said:

The Labour party in opposition needs to be the Labour party in power. And a government doesn’t go on picket lines, a government tries to resolve disputes.

Jeremy Corbyn with the RMT general secretary, Mick Lynch, at Euston station this morning.
Jeremy Corbyn with the RMT general secretary, Mick Lynch, at Euston station this morning. Photograph: Aaron Chown/PA

Liz Truss arriving at her campaign HQ in London this morning.
Liz Truss arriving at her campaign HQ in London this morning. Photograph: Andy Rain/EPA

Anneliese Dodds, the Labour party chair, told Sky News that party whips would be deciding what to do about Sam Tarry’s decision to join an RMT picket line this morning (see 9.52am). She also claimed senior Labour figures should be on the side of a negotiated solution to the dispute. She said:

I personally will not be on a picket line because I am a politician and I believe what politicians should be doing now is what the Conservative government has so appallingly failed to do but what the Welsh Labour government has done because there aren’t strikes taking place in Wales today.

Truss ally Kwasi Kwarteng says Sunak’s VAT on fuel U-turn shows he’s ‘under a lot of pressure’

Kwasi Kwarteng, the business secretary and a leading supporter of Liz Truss for the Tory leadership, has said Rishi Sunak’s proposal to cut VAT on fuel bills suggests he is “under a lot of pressure”. He told Times Radio:

I think [Sunak is] under a lot of pressure. That’s why we see all these statements: he was the person who said the VAT cut would disproportionately benefit rich families and now he’s saying that a VAT cut on energy bills is the right thing.

He was saying that tax cuts were a fairytale; now he is proposing an unfunded tax cut.

There comes a time in campaigns when people are under a lot of pressure, he clearly felt under a lot of pressure in the [BBC] debate and he wanted to get out on the front foot and interrupt Liz.

I think that was the wrong look for him, I think that was the wrong action, but I can understand why he did that.

Asked whether Sunak could win a general election, Kwarteng told LBC radio:

He has flip-flopped and U-turned on this tax issue, which I find somewhat concerning, but he is a capable politician and a very likeable chap.

Kwasi Kwarteng with Liz Truss in the Commons last week.
Kwasi Kwarteng with Liz Truss in the Commons last week. Photograph: Toby Melville/Reuters

These are from the Conservative MP John Redwood attacking Rishi Sunak over his proposed VAT cut for fuel bills.

Rishi told us tax cuts would be immoral. Now he wants one. Rishi stood for election in 2019 on no National Insurance rise, then imposed one. Rishi said tax cuts would be inflationary so he would not offer them . Why should we believe anything he says?

— John Redwood (@johnredwood) July 27, 2022

Why is the Rishi cut of VAT on domestic fuel for one year only? How would imposing VAT on energy just before a General election help Conservatives win it?

— John Redwood (@johnredwood) July 27, 2022

Grant Shapps, the transport secretary and a Rishi Sunak supporter, has also dismissed claims that Sunak’s plan to cut VAT on domestic fuel bills amounts to a U-turn. He told BBC Breakfast:

If [Sunak] hadn’t produced £37bn of support, about £1,200 to the hardest-up households already – if he hadn’t done any of that and then suddenly did it then you would have a point.

But he has, he has been providing all this support, now he is saying ‘here’s something that won’t add to inflation that would save every person watching your programme £160 off their energy bills’ – I think that’s worthwhile.

Shapps challenges Starmer to sack shadow transport minister for joining RMT picket line

Grant Shapps, the transport secretary, has challenged Keir Starmer to sack Sam Tarry, a shadow transport minister, for joining an RMT picket line this morning. Before the last rail strike, Starmer told his frontbenchers they should not join picket lines, although two frontbenchers and three ministerial aides who defied the order were not reprimanded.

Tarry has been giving interviews this morning defending the rail workers, and his right to support them.

But Shapps implied that if Starmer did not sack Tarry, it would be a sign of weakness. He told Sky News:

It’s clearly in direct defiance of Sir Keir Starmer who told his frontbench that they shouldn’t be [on picket lines]. No doubt he’ll want to remove him from his job.

Tarry is already in dispute with Labour HQ over its decision to allow a trigger ballot to go ahead. That means all members in his local party will vote on whether he will remain their candidate at the next election.

Sunak accused of ‘screeching U-turn’ by Truss campaign after proposing scrapping VAT on fuel bills for one year

Good morning. This is the third Tory leadership contest in six years taking place while the party is in government, but in 2016 and 2019 the elections were both dominated by the single issue of Brexit. This is not the case this time, and one consequence of that is that Liz Truss and Rishi Sunak – the two candidates still in the race – are having, or choosing, to say a lot more about policy in a range of areas.

And they are at it again this morning, with both making announcements.

  • Truss, who is now seen as the clear frontrunner in the contest, has promised a return to national crime targets, pledging a 20% reduction in murders, other violence and burglaries within two years. My colleagues Peter Walker and Vikram Dodd have the details here.

In response, the Sunak campaign described this as “a lightweight plan based on publishing data the government already does and a power grab away from police and crime commissioners, including many excellent Conservative PCCs driving down crime in their area”.

  • Sunak has promised to scrap VAT on household fuel bills next year, saving the average household £160. As chancellor he resisted calls to cut VAT on fuel, arguing that this would disproprotionately help wealthy families paying to heat large homes, but he says he favours the move now because the energy price cap is expected to rise above £3,000 in October. The proposal is part of what Sunak calls his “winter plan”, and my colleague Heather Stewart has the details.

The Truss campaign has described this as a “screeching U-turn”. A Truss campaign source told the Telegraph:

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 from someone who has spent the last few weeks of the leadership campaign branding everyone else’s tax cuts immoral and fairytales.

Simon Clarke, the chief secretary to the Treasury and a leading Truss supporter, has made much the same point on Twitter.

Perhaps what is most interesting about the Sunak announcement is what it says about how Sunak thinks his campaign is faring.

As chancellor he always said he was willing to do more to help people with heating bills in the winter. But his last pacakge of measures was largely focused on measures targeted at low-income households; a VAT cut would help everyone, including richer people who need the money much less, which was why Sunak used to argue it was a bad idea. But many of the people voting in the Conservative leadership contest are in this category.

So Sunak is retreating from the preference for targeted intervention that he championed as chancellor. He also risks undermining his main argument against Truss, which is that she has been promising unfunded tax cuts. That is the sort of move you might expect from a campaign in trouble (which is what the polling suggests) calculating that it needs to do something drastic to regain the initiative.

There is not much in the political diary for the day, but campaigning never stops, so we will find something to blog about.

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source: theguardian.com