There has been a great deal of controversy about the Conservative leadership election, with this continuing to hamstring the existing government at a time when households need help to combat rampant inflation.
Currently, just two candidates remain in contention; namely Liz Truss and former Chancellor Rishi Sunak. While hustings are set to continue through August, it’s thought that one of the candidates will officially take office in Whitehall on September 6th.
Both candidates have endured gaffes and questionable policy suggestions to date, although Foreign Secretary Truss remains the clear bookmaker’s favourite. We’ll explore this further, while asking how the policy suggestions compare between the pair.
Truss is the Frontrunner – For Now
The curious nature of UK politics means that just 180,000 Conservative party members will choose the next leader, who will immediately assume office as Prime Minister.
Currently, the majority of this number seem to be backing Truss too, with 58% of canvassed party members suggesting that the Foreign Secretary has their vote to become the next PM. What’s more, Truss is continuing to extend her lead over the former Chancellor, who’s struggling to shrug off his record in government and has faced sustained criticism over this policy uncertainty.
However, the split of votes in much more even in government and among MPs, many of whom believe that Sunak is best-placed to lead the UK through a cost-of-living crisis that’s unlikely to be alleviated any time soon.
Whether this influences members across the wider party has yet to be seen, although there are seven more hustings during which Sunak can make his case.
How do Truss and Sunak’s Policies Compare?
While both candidates have been quite vague and uncommitted when discussing their policies, there are clear differentiators that need to be considered by voters.
For example, Truss is proposing immediate tax cuts and the reversal of the National Insurance tax hike rolled out by Sunak, in a bid to create a low-tax, high-growth economy that staves off the threat of recession.
However, critics have suggested that this could increase inflation in the short-term and ignores the economic challenges facing the poorest in the country, particularly as the most deprived households won’t benefit significantly from tax cuts.
In contrast, Sunak is pledging to tackle inflation as his first priority, by reducing only targeted taxes (such as fuel duty and green levies) and driving growth over a much longer period of time. His supporters have lauded this as a sensible and measured response, even though the economy wouldn’t receive the kind of short-term boost being offered by Truss.
From an investor perspective, Truss may seem like the preferred candidate, particularly if you’re involved with speculative investment vehicles like CFDs and have a short-term outlook as a trader.
However, investors with a long-term outlook (who may buy and hold stocks or operate as a swing trader in the forex market) may prefer Sunak’s vision. After all, he appears to be offering stability and long-term growth, although there remains a lack of clarity about how such a utopia will be achieved.
