Discount most the stuff about this being “the most divisive and acrimonious leadership election ever.” The fall of Thatcher was worse: she had been far more dominant for far longer than Boris Johnson when she was brought down by Michael Heseltine in 1990. And it is there—in the “treason” narrative of her dramatic fall, rather than in the arguments about who best fits her eclectic ideological mantle—that her legacy may be greatest for the Tories today.
The policy arguments between Rishi Sunak and Liz Truss are more apparent than real, which is perhaps why so much of their contest is a trade in personal insults. Both are tilting hard Brexit and populist right on everything from crime and immigration to culture and public services. Neither is proposing to scale back Sunak’s cost-of-living package or increased funding for the NHS and social care. And for all her vague statements about reining in public spending, Truss hasn’t ruled out doing the same again if energy prices keep rocketing up. The NHS, in dire crisis, is almost certain to get a further pre-election boost to help deal with the backlogs, whoever wins.
On tax, where the argument appears to be greatest, the debate is in fact marginal, between some tax cuts immediately (Truss) or some just before the next election (Sunak). To undertake the Sunak tax cuts, borrowing may end up rising in a similar fashion to what would happen with the Truss tax cuts—only it will start a year later.
I suspect that Sunak wishes he hadn’t got into this tax argument at all, but having made resistance to immediate tax cuts a public reason for his resignation as Johnson’s chancellor three long weeks ago, he was boxed in. It would have been sufficient for him to have resigned purely over the conduct of the government, rather than highlighting a wider policy dispute that was clearly bridgeable.
The essential toxicity in the current debate is about the removal of Johnson. His successor—even if it is Truss—will have to cope with him claiming that every departure from his self-proclaimed populism hereafter is a “betrayal.” This will be true whatever he would actually have done in practice, and will echo what happened with Thatcher, who blighted John Major by rallying the Tory grassroots—and a sizeable group of populist Tory MPs—in claiming that she would have been far more hardline than him in “resisting Brussels,” thereby putting Brexit firmly on the map.
For the populist right after Johnson, every tax cut will be insufficient, every foreign intervention weak and every pragmatic deal with Brussels a betrayal.
Whether “betrayal” sinks Johnson’s successor in short order depends in part on whether they can sufficiently unite the parliamentary party to avoid debilitating day by day internecine strife, as beset Major after the 1992 election when his Commons majority was drastically reduced. The fact that Truss or Sunak start with a far larger majority than Major had will make it easier to weather this challenge in the short term.
It depends too on whether the new government looks newly competent, as did Major’s until Black Wednesday and the UK’s forced departure from the EU’s Exchange Rate Mechanism soon after the 1992 election. It could hardly be less competent than Johnson’s.
And it crucially depends on what happens in the real economy, and whether Labour looks like a more credible choice for voters at the next election. The two must go hand in hand. Major won the 1992 election despite a deep recession and cost-of-living crisis which started the previous year, because “tax bombshell” Neil Kinnock’s Labour Party created too many jitters for floating voters.
Keir Starmer’s speech in Liverpool this week disowning virtually all Jeremy Corbyn’s nationalisation plans may turn out to be decisive. But whenever Truss or Sunak cut tax, Starmer will have to answer the question: would Labour reverse these tax cuts? A conundrum indeed.
