Why cost of living talks will have to wait

The Tory leadership candidates will not be joining Boris Johnson in emergency talks about support for people struggling with the rising cost of living. That’s despite calls for them to do so from Gordon Brown, Nicola Sturgeon and the CBI’s Tony Danker, all of whom think the government needs to do something now rather than waiting for September when a new prime minister is in place. Brown’s argument is that Liz Truss and Rishi Sunak need to put aside their differences and agree on something to help families. Downing Street has been very cool indeed on the idea of convening such talks, with Boris Johnson’s spokesman yesterday saying it wasn’t appropriate for the Prime Minister to be taking decisions which were for his successor.

Meanwhile both leadership camps have distanced themselves from this idea, making very similar arguments. The first is that they disagree so fundamentally on what support should look like that it is difficult to identify any common ground. Should it involve tax cuts or ‘handouts’ in the form of higher welfare payments? The former is more typically Conservative and has the virtue of being attractive to members, the latter can be much more targeted than changes to taxation which will also benefit those who aren’t at all worried about their bills. Truss and Sunak spent yesterday scrapping about these different methods, and the suspicion between the campaigns grew throughout the day. By the evening, it was clear that they’d rather wait for the contest to be over in early September than spend any time trying to agree on a policy.

There was some wry amusement in the Truss camp that Sunak is now championing ‘handouts’, given he’s spent much of the contest arguing that tax cuts will be inflationary. A source told Coffee House: ‘The question for Rishi on the economics of his new handout pledges is this: how is he going to fund these new promises? Three weeks ago he was saying more borrowing was irresponsible and inflationary. Has he changed his mind? It feels like another big U-turn. How can Rishi’s borrowing not be inflationary but big tax cuts are? Intellectually it’s as watertight as a sieve.’ Sunak, meanwhile, is happy to wait until the autumn because that’s when the extent of the pressure on households will be clearer anyway: much of it won’t come until October when the energy price cap rises. A source close to Sunak said: ‘Rishi has put in place a significant package of support and will act on his first day in office to provide more help once we know about how much further bills will rise.’

There is another possibility being floated by some around Truss: she could get to work earlier if Sunak just conceded now. But that’s not going to happen. The former chancellor thinks he has a mandate from MPs to keep going through to the proper end of the contest, given he was the frontrunner throughout the parliamentary stages. He also doesn’t think he necessarily needs to admit defeat now because his personal contact with members appears to be so successful (but without any discernible impact on any of the polls). And he thinks that what Truss is proposing is genuinely damaging and that he should make the arguments against it for as long as he can. Finally, both of them agreed with Sir Graham Brady that they would see this contest through, enabling members to scrutinise the next prime minister properly, thereby avoiding a repeat of the 2016 ‘coronation’ of Theresa May.

So the cost of living talks will have to wait. Instead we are due four more weeks of debating the cost of living measures that the two candidates plan to bring in if they win on 5 September. But as the pressure on families grows, so will the sniping between the two camps.