Be it Sunak or Truss, the UK is poised to move in a new direction

Alok Sharma, the UK minister in charge of last year's Cop26 summit on climate change, was so passionate about the job that he broke down in tears when it looked like a final deal was in jeopardy.

He is still on the brief as the world prepares for the Cop27 meeting in Egypt in November. It looks like more tears could be in the offing as he has threatened to hand in his resignation if the ruling Conservative party abandons or waters down the net-zero targets that the country pledged under Prime Minister Boris Johnson.

Mr Johnson is on his way out of power and the final two candidates for the Conservative leadership, Rishi Sunak and Liz Truss, are far more ambivalent about the commitment to carbon neutrality in the face of global warming.

It is just one of a range of areas in which the UK is poised to pivot in a new direction when the new prime minister kisses hands with Queen Elizabeth in early September.

In terms of the climate, Ms Truss, the current Foreign Secretary, has both promised to keep the net-zero target of 2050 but has said that there needs to be better ways to deliver it. She has pledged to suspend green energy levies to ease current energy bills for households.

Mr Sunak, chancellor until earlier this month, has also backed the target but is talking about scrapping renewable energy expansion on the UK land mass. Instead, he wants to put more effort into offshore turbines as well as funding for insulating the country’s draughty homes.

The emphasis in Mr Sunak’s policies is on energy with his proposed new separate Department of Energy to work along aside a dedicated Energy Security Committee overseeing market reforms.

Meanwhile, by setting a target to make Britain energy-sufficient by 2045, Mr Sunak is signalling an increase in UK fossil fuel output. Ms Truss is also making a similar pledge with her commitment to allow UK shale gas fracking, something that governments have failed to get across the line for decades.

On Europe, both sides must perform the role of Brexit hardliner, especially after the EU’s incendiary move to sue the UK for opening the door to systemic smuggling by failing to enforce the divorce agreement.

When former US president Donald Trump told ex-prime minister Theresa May that she should have moved to sue the EU first, he may have had a point on the years of wrangling ahead.

Mr Sunak is committed to removing all EU law from the UK statute book. Ms Truss wants to overhaul the European Convention on Human Rights.

As the campaign unfolds, expect a bidding war on tough stands on migration, too, with the candidates already saying that they back Mr Johnson’s controversial policy on deporting people to Rwanda. Mr Sunak is reportedly planning to frame his migration policies with a keynote speech this week.

It is the economic future that has seen the starkest dividing line drawn. Mr Sunak has called some of what Ms Truss has to say as socialism. Mr Johnson has even intervened to indicate that Mr Sunak’s “treasury orthodoxy” frustrated his government.

While both Ms Truss and Mr Sunak appear poised to drop Mr Johnson’s levelling-up agenda, that is where the consensus ends.

As the architect of the current tax policy, he maintains that tax cuts must wait until public finances are stronger and income tax reductions must follow. Mr Sunak believes that a corporation tax increase should proceed in line with the trend of raising revenues from companies that is prevalent among member states of the Organisation for Economic Co-operation and Development.

Ms Truss is promising a new budget on day one to address the slowdown in the UK economy as a result of rising energy prices. Her emphasis is tax cuts and, as a supply sider, she seeks a Reagan-style boost from a lighter government role in the economy.

What Ms Truss is proposing is a shift from a central bank-directed economic strategy, based on the level of interest rates, to government resuming its dominant role. This, some of her backers say, is worthwhile even as they predict interest rate rises from the current level just over 1 per cent to 7 per cent.

In fact, the theory underpinning her policy will be that government deficits will assist the Bank of England to raise rates while avoiding recession. That would be a whole new world. The principles behind central bank independence of the past three decades would certainly no longer be sacrosanct.

It is hard to escape the conclusion that this really is a watershed choice not only for the UK but for how the western world is going to function in the uncertain period ahead.

Mr Sunak would push very familiar policy options, while Ms Truss would gamble with the untested. Both would have two years to define their agenda before the next election must be called. The backdrop is an international system seized by crisis.

One thing is for sure: electability is not name of the game in this run-off.