That Conservative management front runner Liz Truss has rejected “handouts” as a way to help people affected by the cost of living crisis.
Truss said she would push ahead with proposed tax cuts despite claims they would fuel inflation and “kiss goodbye” to the Conservatives’ chances of winning the next election.
With pressure mounting as households face a financial squeeze, the Foreign Secretary rejected handouts and insisted on tax cuts costing more than £30bn as the country heads into recession.
“Obviously I will look at what more can be done,” Truss told the Financial Times. “But the way I would do things is in a conservative way to lower the tax burden, not hand out handouts.”
Truss’s Tory leadership rival, Rishi Sunakwho have proposed tackling rising prices before tax cuts, said the party could “kiss goodbye” to the chance of winning the next election if they do not quickly bring inflation under control.
Speaking at a leadership party in Eastbourne on Friday, the former chancellor said there would be “no hope that we will win the next election” amid rising prices.
On Thursday, the Bank of England predicted that inflation will increase 13% in October, as it raised interest rates for the sixth time in a row. The bank’s inflation target is 2 per cent.
Workers have been warned against asking for salary increases and more than half of the British are cutting back on their gas and electricity use at home due to the worsening cost of living crisis, according to the Office for National Statistics.
“If we do not act now to prevent inflation from becoming persistent, the consequences will be worse later and will require larger interest rate increases,” said Andrew Bailey, the bank’s director. “Returning inflation to its 2% target remains our absolute priority, no ifs, no buts.”
The news comes after UK Business Secretary Kwasi Kwarteng admitted it would be more than a month before ministers can introduce measures to tackle the rising cost of living.
Kwarteng, who is backing Truss as the next leader of the Conservative Party, said the expected “support package” from Boris Johnson would come after his holiday. Both Johnson and the chancellor, Nadhim Zahawi, were on holiday when the Bank of England warned the economy was heading into the longest recession since the 2008 financial crisis.
Truss, who has already promised to reverse a rise in national insurance rates, is expected to outline further proposals to boost economic growth when they attend the Commonwealth Games in Birmingham on Saturday, the BBC reports.
“One of the issues I will look at is the control of the money supply and in particular the quantitative easing policy and the effect that has had,” Truss told the Financial Times.
The winner of the Conservative leadership contest will be announced on September 5.