When the results of the Conservative leadership race are announced next week, the UK’s new prime minister will be facing a formidable set of challenges. There is the worst cost of living crisis in 50 years, a war in Europe, an antagonistic relationship with the EU and divisions within the Conservative party itself. The public is sceptical about the government’s ability to solve any of these issues with many switching to Labour in the polls since December of last year.
Given this array of problems, presumed next prime minister Liz Truss’s focus on tax cuts as the solution to rapidly growing inflation looks very odd. At a time when the pound is rapidly falling in currency markets and Citi bank is forecasting an inflation rate of 18% in 2023, putting tax rebates into people’s pockets runs the risk of making inflation worse.
There is a strategy behind Truss’s approach, which makes sense if we look closely. There are votes to be won by focusing on taxes – but these are among Conservative party members, not the general public.
