Rishi Sunak’s retreat from true pragmatism may herald return of Liz Truss-style economics – Scotsman comment

Prime Minister must resist growing calls for tax cuts if the country cannot afford them

When Rishi Sunak took over as Prime Minister, he was billed as a stabilising force after the turmoil of the Liz Truss weeks. And initially, he lived up to that billing.

However, his decision to roll back on climate change-related targets suggests he is now warming to the siren calls from the right of his party. And, emboldened by what they see as progress, they are now making calls for tax cuts ahead of the general election expected next year.

Fortunately, Chancellor Jeremy Hunt, an arch-pragmatist, is resisting their appeals. “If you look at what we are having to pay for our long-term debt, it is higher now than it was at the spring Budget. I wish it wasn’t. It makes life extremely difficult, it makes tax cuts virtually impossible and it means that I will have another set of frankly very difficult decisions,” he told LBC radio.

Unfortunately, the tax-cutting chorus is only going to get louder and Sunak may yet yield to the pressure, as his MPs demand some decisive action that they hope will save their seats. If the Prime Minister does relent, it remains to be seen if his Chancellor will also acquiesce in what could be a decisive moment for the government.

Truss’s unfunded tax cuts spooked the markets and cost the Treasury an estimated £30 billion. It would be astonishing if Sunak and Hunt were to do anything even remotely as bad, but pressure can do strange things to people.

Tackling climate change is not a fanciful endeavour, as its critics on the Conservative right sometimes insist. Firstly, it is vitally important for the future of humanity; it is, as King Charles said yesterday, “the greatest existential threat of all”. And secondly, the action required to transition to a net-zero economy is fundamental to the continued health of the economy.

Any pragmatist worthy of the name must face reality, such as global warming is a serious threat and it’s foolish to make tax cuts the country can’t afford. As Sunak faces criticism from the government’s own climate advisers, his credentials as a pragmatist are not as strong as they once appeared.