London Daily

Focus on the big picture.
Wednesday, Sep 16, 2026

U-turn on energy profits flags up Sunak’s lack of long-term plan

Analysis: Many Tory MPs say they don’t get what the chancellor stands for and this policy reversal won’t enlighten them
“He’s out-Laboured Labour” was the verdict of one upbeat Tory aide after Rishi Sunak announced £15bn worth of handouts to UK households in what was, to all intents and purposes, an emergency budget.

The scale of the package was larger than many in Westminster had expected. But when Sunak decides to do a U-turn, he tends to go big.

The “temporary targeted energy profits levy” – don’t say windfall tax – raises significantly more than Labour’s would have. And the cost of living payments were more targeted, and much more generous, than the measures in the spring statement.

As Paul Johnson, the director of the Institute for Fiscal Studies, put it: Sunak’s overall approach – taking this announcement along with other recent outings – is “hugely redistributive, taking from high earners and giving to the poor”.

After the punishment beating Boris Johnson’s Tories have taken over Partygate, the announcement will have done him no harm with backbenchers fed up with having no answer to constituents struggling to heat their homes or feed their kids.

Backbench MPs from across the party had been putting pressure on the Treasury to act and in the absence of a clear steer, floating their own widely differing plans for tackling the crisis.

Johnson was widely ridiculed earlier this month when he responded to a heartbreaking story from a Good Morning Britain viewer, Elsie, about riding around on buses to save on energy bills by boasting about the Freedom Pass.

Next time he is asked, Sunak’s package will give the prime minister something concrete to say.

After many months of being the leading contender to succeed Johnson, Sunak’s ham-fisted spring statement, combined with negative stories about his personal tax affairs and those of his super-rich wife, had led many to write off his leadership chances.

But the blizzard of slick social media messaging that poured out alongside the statement – complete with Sunak’s signature – suggested the one person who hasn’t written off his chances is the chancellor himself.

The lofty tone of his speech in the chamber harked back to Sunak’s greatest political hit, the furlough scheme, as he promised, “this government will not sit idly by whilst there is a risk that some in our country might be set so far back … they might never recover”.

Yet when you look back on the past six months, the overwhelming impression is of a government without what George Osborne used to call a “long-term economic plan”.

They were against a windfall tax, now they have implemented one. Sunak claims to be a tax-cutting chancellor, but the tax burden is rising. He thinks tackling the deficit is a “moral responsibility”, but two-thirds of Thursday’s £15bn package is unfunded or, in other words, paid for by increased borrowing. And he repeatedly implements policies that are partly – or fully – reversed, sometimes just a few months later.

The £20 universal credit uplift was scrapped, but then part of the cut was handed back to low-income households with a cut in the taper rate. The hard-fought health and care levy was partly handed back with the increase in the NICs threshold. And a widespread backlash has led Sunak to cancel plans to claw back October’s energy bill rebate –while doubling its value. Putting it politely, he’s all over the place.

Cabinet ministers put these zigzags down partly to wrangling between Sunak and Johnson, who are very different Conservatives without a shared political project – if indeed Johnson has a project at all, aside from keeping himself in No 10.

But many Conservative MPs say they struggle to discern what it is the chancellor stands for either, aside from burnishing brand Rishi. Thursday’s statement, embracing a policy he had previously scorned, and all but conceding that the spring statement fell way short of the scale of the crisis, did little to change that.
Newsletter

Related Articles

0:00
0:00
Close
Police Tighten Public-Order Measures After Anti-Immigration Protests in Dover and Portsmouth
UK Ministers Pressed for Answers After US Diplomat Accused of Child Abuse Images Leaves Britain
Jaguar Land Rover Pursues NATO Defense Contracts for Defender Vehicles
British Service Member Dies in Road Accident While Deployed in Ukraine
George Osborne Calls for Britain to Rejoin EU Customs Union
Anthropic Chief Dario Amodei Urges Faster UK Action on Advanced AI Risks
UK State Pension Set for 3.9% Rise Under Triple Lock
UK Labour Market Cools as Payrolled Employment Continues to Decline
Reform UK’s £72 Million in Donations Faces Scrutiny Under Proposed Retrospective Funding Rules
UK Doctors Warn Expanded Pharmacy First Scheme Could Put Patients at Risk
British Airlines Cut Short-Haul Capacity as Jet Fuel Costs Rise
UK News Publishers Forecast 40% Search Traffic Drop as AI Overviews Expand
Axel Springer Wins Approval for £575 Million Daily Telegraph Acquisition
London Mayor Sadiq Khan Opposes Heathrow Third Runway Over Climate Targets
Scotland, Wales and Northern Ireland Leaders Hold Summit Seeking Greater Autonomy
UK Energy Price Cap Set to Rise to £1,723 in October
UK Treasury Warns Middle East Conflict Is Threatening Economic Growth
Labour Moves to Retrospectively Cap Overseas Political Donations After Reform UK Funding Surge
HMRC Warns Nearly Seven Million Adults Are Unclear About State Pension Entitlements
UK Parliament Passes Sovereign Grant Reform Before Conference Recess
British Rail Passengers Gain Automatic Right to Switch Operators During Disruptions
Burnham Hosts Downing Street Business Summit as UK Fiscal Pressure Builds
Labour Government Moves to Challenge £72 Million in Reform UK Crypto Donations
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
NHS Records Busiest Summer on Record Amid Severe Heatwaves
Harrods Faces Potential £150 Million Compensation Bill Over Al Fayed Abuse Claims
UK Parliament Opens Debate on Landmark Assisted Dying Legislation
Metropolitan Police Investigate Reform UK Over Alleged Foreign Electoral Donations
UK Economy Expands 0.4% in July as AI Investment Boosts Activity
Bank of England Signals Caution on Rates as Inflation Pressures Persist
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
×