Liz Truss’s humiliating U-turn on her proposal to cut regional public sector pay proved the ultimate example of how big policy offers can fall apart quickly on contact.
As part of a package to clamp down on civil service expenditure dubbed a “war on waste”, Truss claimed up to £8.8bn could be saved by creating regional pay boards. These would in effect have watered down the pay packets offered to officials seeking new contracts outside London and the south-east, given the relatively lower cost of living away from the capital.
Sunak’s supporters immediately seized on the policy as an example of “levelling down” – with the Tory mayor of Tees Valley, Ben Houchen, saying millions of nurses, police officers and armed forces would effectively face a pay cut. While Truss’s campaign claimed the criticism was a “wilful misrepresentation”, they U-turned less than 24 hours later and said the proposal would not be “taken forward”.
But it is not the only policy touted by the two candidates to be prime minister that might not stand up to greater scrutiny.
Liz Truss’s pledges
Tax has been a key dividing line in the contest, with Truss promising to cancel the 1.25 percentage point increase in national insurance contributions earmarked to pay for the increase in NHS and social care, which came into force in April. She has also pledged to cancel a sharp corporation tax rise slated for next year.
She has suggested the plans will help tackle the cost of living crisis – but the Resolution Foundation has pointed out that only 15% of the benefits of the NICs cut will go to the poorest half of the population, who will be hit hardest by energy price rises.
Meanwhile, it has been suggested repeatedly that unfunded tax cuts could boost inflation, forcing the Bank of England to push up interest rates – perhaps not to 7%, as her economic guru Patrick Minford suggested, but by more than they would otherwise, the Resolution Foundation suggesting perhaps to 1 percentage point.
Cutting crime by 20%
Truss has pledged to oversee a reduction in key crimes by 20% before the end of the parliament and that data on homicide, serious violence and neighbourhood crime will be published force by force. Those statistics are already collected by the government and the announcement did not offer any new resources or say how such a dramatic reduction could be achieved.
Sir Peter Fahy, the ex-chief constable of Greater Manchester police, said targets had been shown to create perverse incentives where officers concentrated on easier wins to boost stats and not complex cases or the most vulnerable.
The Truss plans are similar to measures discussed by senior Home Office officials and police chiefs in late 2020 and 2021, but which were not enacted.
Rishi Sunak’s pledges
Cut taxes by 20% by the end of the next parliament
Team Truss called this a U-turn by Sunak who had previously warned against promising immediate tax cuts, but it is a less obvious one than his pledge to cut VAT on energy bills, which he refused to do as chancellor. The most obvious gap in this policy is the feasibility of making promises about what tax cuts can or can’t be made in as far away as 2029, without any idea of the fiscal situation.
The Institute for Fiscal Studies points out that while it is a substantial cut, it is still considerably smaller than the net tax rise announced by Sunak as chancellor, which was “comfortably more than twice as large”. Sunak’s new policy would still leave the total tax take, as a proportion of national income, at its highest level since around the early 1950s.
Sunak’s offer is made because the Treasury has “headroom” before it breaches fiscal rules on borrowing. But given the volatility of the economic situation, it is easy for that breathing space to disappear.
Charging for GP appointments
Sunak said he would introduce a temporary £10 charge for patients who miss a “second or subsequent” GP appointment. The approach appears to be aimed at incentivising patients not to skip appointments lightly; but it was criticised by doctors’ leaders and healthcare policy experts.
The NHS Confederation warned that the costs of administering the scheme were likely to outweigh the money raised, and suggested it was more important to deal with the reasons people are unable to attend, with home visits and evening appointments, for example.
The BMA said it would break the principle that primary care is free at the point of use, while failing to tackle the real problems the NHS faces.