London Daily

Focus on the big picture.
Tuesday, Apr 07, 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
King Charles Faces Criticism From Some UK Christians Over Absence of Easter Message
Former UK Defence Secretary Raises Concerns Over Ability to Counter Iran Missile Threat
UK Signals Non-Involvement in Iran Conflict as Trump Reasserts Firm Deterrence Stance
US and UK Strengthen Medical Device Cooperation Following Tariff Removal
Trump Backs Steve Hilton for California Governor, Highlighting Reform Agenda
UK Seeks Closer Ties With Anthropic as AI Policy Divergence Emerges Across Atlantic
Experts Warn of Evolving Extremism After Teens Arrested in UK Ambulance Arson Case
UK Convenes Talks to Safeguard Shipping Through Strait of Hormuz After Conflict Escalation
Trump Highlights Strong Leadership in Critique of UK Stance on Iran
UK Authorities Review Kanye West’s Entry Status Following Festival Backlash
UK Considers Deploying Aircraft Carrier for US Independence Day Celebrations Amid Renewed Transatlantic Focus
United Kingdom Moves to Attract AI Firm Anthropic Amid Tensions with US Defense Officials
RAF Intercepts Iranian Drones in Middle East to Defend Allied Security Interests
Labour Signals Shift on Foie Gras and Fur Restrictions to Advance EU Trade Talks
Seven Arrested Near RAF Base as UK Authorities Respond to Protest Activity
Economic Pressures Mount as Analysts Warn UK Growth Is Being Constrained by Policy Burdens
UK Green Party’s Push for Church-State Separation Sparks Debate Over National Identity
Strategic Island Emerges as Growing Challenge for United States and United Kingdom Defense Planning
Pepsi Pulls Sponsorship from UK Festival Following Backlash Linked to Kanye West
Signs Emerge of Declining Enthusiasm for Social Media in the United Kingdom
Security Alert Raised Ahead of Meghan Markle’s Planned Visit to Australia
UK Food Halls Defy Hospitality Slowdown, Emerging as Bright Spot in Challenging Market
UK Sets Firm Conditions for Military Action, Insisting on Legal Mandate and Clear Strategy
UK Medicines Regulator Launches Probe into Peptide Clinics Over Health Claims
New North Sea Drilling Unlikely to Significantly Cut UK Gas Imports, Analysis Finds
Woman Linked to UK’s First All-Female Terror Plot Faces Deportation
Downed US Aircraft Over Iran Linked to Operations from UK Airfield
Two Men and Teen Detained in UK Following Attack on Jewish Charity Ambulance
UK Police Launch Inquiry After Firearms Left Unattended Outside Mayor’s Residence
Giuffre Family Calls on King Charles to Meet Epstein Survivors During US Visit
Amber Wind Warning Issued as Storm Dave Approaches Parts of the United Kingdom
Prince Harry and Meghan’s Australia Visit Set to Draw Heightened Global Attention
UK Considers Entry Fees for Overseas Visitors at Major Museums Ahead of 2026 Travel Season
UK Prime Minister and Kuwait Crown Prince Coordinate Security Response After Regional Escalation
Calls Grow to Expand Fully Paid Maternity Leave for UK Teachers Amid Workforce Pressures
UK Secures Tariff-Free Access to US Market in Landmark Pharmaceuticals Agreement
Trump Projects Strength in Critique of UK Leadership and Naval Readiness
UK FinTech Setback as VibePay and Smartlayer Cease Operations Amid Funding Pressures
UK Leads Global Coalition of Over Forty Nations to Address Strait of Hormuz Crisis
UK Firms Urged to Accelerate Preparation as New Sustainability Reporting Rules Take Shape
UK Moves Rapid Sentry Air Defence System to Kuwait After Drone Strike Escalation
Transatlantic Relations Tested as UK Seeks Balance While Trump Reshapes Strategic Approach
Trump’s Strategic Pressure on UK Seen as Push for Stronger Alignment and Fairer Terms
UK Focuses on Trade Finance to Secure Critical Materials for Defence and Energy Sectors
Majority of UK Businesses Hit by Middle East Conflict While Confidence Holds Firm
UK Royal Navy Faces Renewed Scrutiny as Debate Intensifies Over Capability and Readiness
Reform UK Faces Mounting Distractions as Policy Agenda Struggles to Gain Traction
Investigation Launched Into Northern Cyprus IVF Clinics After UK Families Receive Incorrect Sperm
International Meeting Issues Unified Call to Safeguard Navigation Through Strait of Hormuz
Potential Strait of Hormuz Closure Raises Concerns Over UK Food and Medicine Supply Chains
×