London By Tuesday of this week, the race for leadership in Great Britain seemed to be over: British Foreign Secretary Liz Truss had increased her lead in the competition for the post of head of the Conservative Party in Great Britain to 34 percentage points over her rival Rishi Sunak, according to the latest polls. On the way to the seat of government at 10 Downing Street, she could only trip herself. And so she did.
Apparently intoxicated by the good poll numbers and cheered on by liberal business friends, the 47-year-old launched a “war” against the waste of taxpayers’ money in the style of her political role model Margaret Thatcher.
Among other things, she suggested paying employees in the public sector differently depending on the cost of living. Teachers and nurses in the already poorer north of England should therefore get less than their colleagues in rich but also expensive London.
The cold logic of economics promptly collided with the Tories’ promise to equalize the living conditions in the socially divided island kingdom through a “leveling-up campaign”. The outcry reached far into the Conservative Party: “This is a downward adjustment, not an upward one,” Truss’ party colleague, former Health Secretary Matt Hancock, rumbled on Twitter, warning that such a misstep could cost the Tories victory in the next general election.
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It was only a few hours before Truss had to recapture her thorny proposition and, in a complete about-face, declared there would be no regional pay gaps in the public sector.
The fact that on the same day she also described the Scottish Prime Minister Nicola Sturgeon as a “self-promoter” who is best ignored, made the first mega glitch in her campaign perfect. The would-be prime minister fueled the displeasure of the Scots who were pushing for independence.
Who stands for a change of course and who for “business as usual”?
The postal voting documents were supposed to be sent this week to the approximately 180,000 members of the Conservative Party who are to appoint a new head of the governing party by September 5, and thus also the successor to Prime Minister Boris Johnson, who was forced to resign.
After a warning from the British secret service for cyber security GCHQ about a possible manipulation of the election by “nefarious actors” – probably meaning Russian and Chinese hackers – the ballot letters are now delayed. The originally planned possibility to change the voting online again should no longer exist.
Doctors work in an intensive care unit at Frimley Park Hospital where people infected with the corona virus are treated.
(Photo: dpa)
The first impression is therefore all the more important. When Truss and former Finance Minister Sunak met on Wednesday evening for the third of a total of twelve speech duels in a town hall event in Cardiff, the race seemed to be a little more open again.
The two candidates have narrowed their competition to the question of who stands for a change of course and who for a “business as usual” of the Johnson era. It is therefore not without irony that the conservative party base does not want that much change – 40 percent of the Tories still want Johnson back as prime minister. This is probably one of the reasons why both candidates shy away from a hard break with their predecessor’s policy.
>> Also read here: Johnson successor: Truss and Sunak face party members
The differences between Truss and Sunak are most evident when it comes to tax policy. While the Foreign Secretary promises immediate tax cuts totaling around £30 billion and does not want to raise corporate tax for companies from 19 to 25 percent as planned by Sunak, the former Finance Minister is banking on solid public finances and warns against increasing the high inflation rate of 9 .4 percent additionally through tax cuts.
“Sunak is much more cautious than Truss and prioritizes the fight against inflation,” says Ben Zaranko of the Institute for Fiscal Studies (IFS) in London. Sunak’s point that tax cuts at this point in time could force the Bank of England to raise key interest rates more than planned is entirely understandable.
Bank of England becomes the scapegoat
The British central bank will probably raise financing costs by half a percentage point to 1.75 percent on Thursday. Truss is already critical of the Bank of England’s course and has announced that it will review the central bank’s mandate. Ben Nabarro, Citibank’s chief UK economist, has criticized Truss’s economic policy ideas as the “greatest threat” to the UK economy.
However, Sunak is in a difficult position in his party because he has pushed the tax burden to the highest level in 70 years. In order not to completely squander his chances, the 42-year-old recently made a U-turn and announced that he would suspend the five percent VAT on energy for British households for a year. Knowing full well that it is politically almost impossible to reverse this step later.
How Sunak intends to permanently close the budget gap of around four billion pounds a year and also reduce income tax in 2024 is just as unclear as the answer to the question of how Truss intends to finance the much larger gap in their tax plans.
Especially since Truss also wants to raise defense spending to three percent of gross domestic product and has promised to reverse the increase in contributions to National Insurance. “Both candidates promise a lot without saying how they intend to pay for it,” says IFS economist Zaranko.
Largely united on domestic policy
The two candidates are much closer to each other on the most important domestic political issues. Truss and Sunak have both announced that they will continue the leveling-up program initiated by Johnson – not least because they want to secure the Tories’ vote gains in northern England, which has traditionally been dominated by the opposition Labor Party.
Truss has pledged that it will continue to push the approximately 43 billion euro high-speed line in the north of England (Northern Powerhouse Rail).
Aslef train drivers’ union members strike outside King’s Cross station in London.
(Photo: dpa)
On the other hand, both want to show toughness towards the unions, which have been trying for weeks to achieve higher wages with strikes in order to absorb the sharply rising cost of living. “Both candidates want to limit the right to strike, but have no recipes to stop the cost of living rising,” criticizes Jonathan Webb of the Institute for Public Policy Research.
This is where the Tories’ dilemma comes into play, says Webb. Equal living conditions and better pay in the public sector are far less important for conservative party members than for conservative voters.
The NHS health system remains a permanent patient
Truss and Sunak also want to reform the financially ailing NHS state health system. However, there are hardly any concrete proposals for this. Sunak has raised the issue of penalties for patients who fail to keep their doctor’s appointments without justification. Truss has vaguely opposed “austerity” in healthcare.
>> Also read here: Despite fears of a recession, a trade war with Great Britain is looming
The candidates also agree that they should continue to fly asylum seekers in Great Britain to Rwanda. British authorities are expecting more than 17,000 refugees to cross the English Channel by boat this year. On Monday of this week alone there were almost 700. In view of these figures, the question arises as to whether the Rwanda plan has any deterrent effect at all and whether the government in London is willing to pay the cost of the expensive deportation.
Climate policy plays almost no role in the race for the post of next prime minister. Truss has even announced that it wants to suspend the price premium to support renewable energy and is loudly considering allowing fracking again in the UK.
Under pressure from the conservative party base, Sunak wants to stick to the ban on new wind farms in rural areas. How both of them want to achieve the proclaimed goal of completely freeing the British economy from CO2 emissions by 2050 remains unclear.
Both emphasize toughness towards China and the EU
In foreign policy, the main differences are in tone. “Truss is more along the lines of Boris Johnson: she is tough on China, Russia and the EU and believes in a global role for Britain,” said David Lawrence of the foreign policy think tank Chatham House in London. Sunak is concentrating more on domestic politics and, for economic reasons alone, is more willing to compromise with the EU in the dispute over the Northern Ireland Protocol. The agreement governs trade between the province of Northern Ireland and the rest of the kingdom. Truss recently tabled a bill in the British Parliament to unilaterally suspend the agreement.
Both candidates also make more noise than smoke when it comes to Russia and China. “Both try to outdo each other with harsh words to Beijing,” says Lawrence. It’s a bit more difficult for Sunak because he had been propagating a trading partnership with the Middle Kingdom some time ago. However, public opinion and the political leadership of the USA had also led to a change of course in Great Britain. “However, the United Kingdom is economically less dependent on China than, for example, Germany,” the foreign policy expert points out. British investment in China has been declining for a long time. Only the global value chains are still dependent on the new superpower.
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