It is difficult to see what the prime minister stands for

Editorial: Ms Truss is more pragmatic than she sometimes likes to make out, and has proved she can U-turn when she wants to

Liz Truss sits beside her chancellor as he speaks in the Commons on Monday (PA)

The least expected – and most momentous – of what might be described as Jeremy Hunt’s “reverse” mini-Budget is the review of the energy price guarantee after April. When Liz Truss announced the scheme in her first days as prime minister, it was universally and warmly welcomed (albeit overshadowed by the death of the Queen).

It was, indeed, one of her few decisions that seemed both wise and compassionate. Given the scale of the cost of living crisis and spiralling energy bills, some scheme to keep people warm and businesses running may have been almost unavoidable, regardless of which party was in power. It was, though, with the measures previously announced by Rishi Sunak as chancellor, well targeted, and a great reassurance for families that were fearful for the future. It was to last for two years at least.

No longer. According to the new chancellor, it is going to be subjected to a “Treasury-led review”; an appropriately chilling-sounding exercise explicitly aimed at reducing the costs to the Exchequer. Mr Hunt, who has turned the situation around in remarkably short order, rightly points out that the existing scheme does leave the taxpayer with a virtually unlimited exposure to gas and electricity prices.

A semi-permanent cap on energy prices also blunts the incentives on households to economise on energy, insulate their homes and instal new technologies. In cold, hard macroeconomic terms, the price cap scheme also tends to compensate for the loss of spending power that would otherwise occur, and which would otherwise reduce demand and inflationary pressure in the economy as a whole.

So there will be more hardships to come, and Mr Hunt is not finished yet. He has promised to be an “honest chancellor”, and he freely used the “c-word” in his broadcast (and not the one radio presenters sometimes trip up on). “Cuts” are coming – not just those euphemistic “efficiency savings” – and higher taxes too.

By the time Mr Hunt has published his medium-term fiscal plan in a fortnight, he will have a programme of higher taxes and lower spending than Mr Sunak, let alone Kwasi Kwarteng. The basic rate of tax, for example, is not only going to stay where it is next spring, reversing what Mr Kwarteng planned. It is going to be the same the spring after, when Mr Sunak planned to nudge it down, and indeed it will now remain “indefinitely” at 20p in the pound, with personal allowances and thresholds frozen.

Ms Truss complained bitterly in her leadership campaign, and in the first, reckless phase of her premiership, that the UK urgently needed to rescue a tax “burden” at a 70-year high. Now it is at least possible that it will trend still higher. Ms Truss used to quip that “you can’t tax your way to growth”, which Mr Hunt says he agrees with but is taking little notice of nonetheless.

At her last Prime Minister’s Questions, Ms Truss defended slashing planned corporation tax rates in unequivocal terms: “I feel it would be wrong, in a time when we are trying to attract investment into our country and at a time of global economic slowdown, to be raising taxes, because it will bring less revenue in. The way we are going to get the money to fund our national health service and to fund our schools is by having a strong economy, with companies investing and creating jobs.” Presumably, now, the Treasury will be losing revenue and will be less able to fund public services; though that is not what the new chancellor says.

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In her Margaret Thatcher cosplay, Ms Truss made much play of being prepared to be unpopular, but also of sticking to her decisions and being trusted to “deliver”. It became a rather tiring routine. We won’t hear much about that for some time.

The government may have rediscovered a sense of purpose, but it is a highly conventional one, imbued with “Treasury orthodoxy” and the instincts of what she recently dubbed “the anti-growth coalition”. It is bizarre that the prime minister should herself now, apparently, be joining the ragtag and bobtail rabble she derided in her keynote conference speech.

Yet the country is being asked to believe that she has “listened”, and has experienced some sort of Damascene conversion. Perhaps so. Her entire reforming “growth, growth, growth” programme has been abandoned, and she appears content to carry on, overseeing policies she once ridiculed. As a former Lib Dem republican, ex-Cameroon and ex-Remainer, Ms Truss is more pragmatic than she sometimes likes to make out, and has proved she can U-turn when she wants to.

It is all very well but a premier is supposed to lead, and it is hard to see what the prime minister stands for. A general election might answer those questions but Ms Truss seems disinclined to face the nation for the time being.