Rishi Sunak’s plan to cut VAT on energy bills ‘a strident U-turn’ | Rishi Sunak

Rishi Sunak’s last-minute proposal to cut VAT on energy bills has been described as “a strident handbrake U-turn” by Business Secretary Kwasi Kwarteng.

Kwarteng, who backs Liz Truss in the race to become prime minister, said on Wednesday: “If that’s not a U-turn, I don’t know what is.”

Sunak was previously the only candidate in the Conservative leadership race who did not pledge to cut taxes. But on Tuesday night, as his chances of leading the country appeared to dwindle in the polls, he announced he would scrap VAT on energy bills, saving the average household £160.

In a series of interviews aired Wednesday morning, Kwarteng was damning about Sunak’s shift in stance.

He told Sky News he was “delighted to see that Rishi Sunak has now arrived late to the party and has decided that tax cuts are a good idea and not a fairy tale. And being an adult…means you can get tax breaks.

Sunak had opposed the tax cut in question in February when he was chancellor, telling the Commons that the policy would “disproportionately benefit the wealthiest households”. Sunak said the cut was “targeted and temporary” and called it a winter plan to combat rising energy bills.

Kwarteng said: “Let’s not beat around the bush: it’s a U-turn. A few months ago, he said VAT on energy bills would disproportionately help the wealthy; it was not targeted enough at vulnerable people and that is why he decided not to accept it. People suggested it. He rejected it.

“Just last week he said the tax cuts were part of a fairy tale, that he was the only adult in the contest because he was raising taxes where all the other contestants suggested tax reductions. I am therefore delighted that today he is announcing that he wants to abolish VAT on energy bills. It’s a half-turn. I mean, if that’s not a U-turn, I don’t know what is.

Before a TalkTV debate between the two candidates on Tuesday night was cut short after host Kate McCann passed out, Truss had attacked Sunak for raising national insurance to fund the NHS and social care following Covid-19.

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Truss said: “I think it’s morally wrong at this time when families are struggling to pay for the food we’ve forced on ordinary people when we said we wouldn’t in our manifesto and we didn’t need to do then.”

Throughout the contest, Sunak defined himself as the candidate willing to make unpopular tax decisions to keep the economy stable and curb borrowing.

During Tuesday’s debate, he appeared to be sticking to his guns as he criticized Truss for offering to delay repayment of debts incurred during Covid. “What is morally wrong is asking our children and grandchildren to foot the bill for bills that we are not prepared to pay,” he said.


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