What advisers can expect from Rishi Sunak as prime minister

However, there is still a chance that come September 5 the former chancellor, whose resignation led to the end of Boris Johnson’s premiership, could find himself in the top job.

So what would a Sunak government look like?

I don’t cut taxes to win elections, I win elections to cut taxesRishi Sunak, MP

The main difference between Sunak and his opponent, Liz Truss, is Sunak’s refusal to cut taxes before inflation has been brought under control.

He has warned these cuts would “put fuel on the fire” of price rises, which hit 10.1 per cent last month.

Earlier this summer, Sunak told the BBC’s Today programme that “of course” he wants to deliver tax cuts, but these would be done in a “measured way”.

“I will get taxes down in this parliament, but I’m going to do so responsibly because I don’t cut taxes to win elections, I win elections to cut taxes," he said.

Income tax

In a move some saw as a subsequent u-turn, in early August Sunak promised a cut in the basic rate of income tax.

The current rate of 20 per cent would be cut to 19 per cent in 2024, and down to 16 per cent by the end of the next parliament in 2029.

Sunak called the plans a "radical vision", but he was criticised by chief secretary to the Treasury, Simon Clarke, who said the UK "cannot afford to wait" to help families, who need support now.

Figures from the Office for Budget Responsibility showed that even with the tax cut in 2024, households' tax burden would still be the highest since just after the second world war.

Energy bills

Sunak has also pledged to cut the 5 per cent VAT on domestic energy bills as a temporary measure, to combat the rising cost of energy. 

This is despite previously rejecting calls to get rid of the tax, telling MPs in February that this would “disproportionately benefit wealthier households”.

Sunak also said he would be concerned that any tax cut would become permanent.

IR35 reforms

Truss recently gave an interview where she indicated she would review the IR35 reforms.

The reforms were introduced in April 2021 to the private sector, and means that the responsibility for assessing whether a contractor is self-employed or employed is now with the end client, and not the contractor themselves. 

The liability, and therefore financial risk, was also transferred to the fee-paying party.

The changes have been branded “a mess”, “unpopular” and “puzzling”.

The controversy surrounding the changes prompted the former chancellor, Sajid Javid, to pledge a review of IR35 as part of the Conservative party’s manifesto in the lead up to the general election.

However Sunak is unlikely to renege on the reforms.

Pensions/triple lock

Sunak has previously confirmed the triple lock for pensions will return in 2023.

The triple lock means that the state pension is increased by the highest of earnings growth, price inflation or 2.5 per cent a year.

Businesses simply aren’t investing enoughRishi Sunak, MP

Last year there were concerns the measure would lead to the state pension rising by an artificially high amount because earnings growth was abnormally high due to the return of many workers from furlough after lockdown.

Therefore this April the state pension only increased by 3.1 per cent, which was September’s CPI figure.

However, persistent high inflation and rising energy prices led to calls for the lock to be reinstated, leading to a potential 10 per cent rise in state pensions. 

Corporation tax

One of the reasons for Sunak’s resignation in July was repeated clashes with prime minister Boris Johnson over tax changes, and specifically Sunak’s refusal to cut corporation tax.

The 2016 Budget announced that corporation tax in 2020 would be reduced to 17 per cent, however it was later announced that the tax will be held at 19 per cent.

From 2023, the rate is due to be increased to 25 per cent.

Business leaders have hit out at the potential policy, saying it is a tax levied on profits at a time when many companies are facing recession.

But Sunak refused to back down, and instead focused on a cut on business investment, saying that “businesses simply aren’t investing enough”.

He was also said to be looking at reform of tax credits for research and development, and an improvement on the apprenticeship levy.

Social care levy

As another of Sunak’s legacies, it is unlikely the social care levy will change were he to become prime minister.

The levy is a 1.25 percentage point increase in national insurance, which began in April this year, aiming to raise £12bn annually to fund social care and reduce backlogs.

From next year, the levy is due to be split out as a separate tax, though Truss has confirmed her intentions to get rid of it entirely.

sally.hickey@ft.com