Conservative leadership hopefuls have clashed over how best to help households amid the cost-of-living crisis, with Liz Truss ruling out direct support and instead insisting on tax cuts – an approach her rival has called “simply wrong”.
Mrs Truss, the Tory front-runner, has rejected “handouts” to help households through the worst income squeeze in 60 years.
However, her opponent Rishi Sunak has hit back, saying: “We need to get real about this situation.
“It is simply wrong to rule out further direct support at this time Liz Truss has done, and what’s more, her tax proposal is not going to help people like retirees or those on low incomes very much, which are exactly the kinds of families that need help.”
He also said he would “go further” than the support of up to £1,200 for people he announced as chancellor if he becomes prime minister once there is “certainty about exactly what the bills are going to be in the autumn”.
During a campaign visit to the West Midlands on Saturday, Mrs Truss took a swipe at her rival’s economic legacy, blaming it for the expected recession.
The Foreign Secretary told reporters: “Under the plans at the moment, what we know is that the UK is headed for recession.
“It’s not inevitable, but we have to avoid it by making sure our economy is competitive, that we encourage businesses to grow and that we keep taxes down.”
“Having the highest taxes for 70 years will not deliver economic growth and it will lead our country into a recession.”
Tax cuts can boost inflation – predicted to top 13%
Earlier this week, in an interview with the Financial Times, Mrs Truss insisted she would push ahead with tax cuts, despite claims they would boost inflation – already predicted to top 13%.
Asked how she intended to help households facing rising energy bills this winter, she insisted the answer was tax cuts and supply reforms.
Former deputy governor of the Bank of England Charles Bean told Sky News that Ms Truss’s plans “are not particularly targeted in terms of dealing with people most affected” by the energy price rise.
He added: “The existing package that the former chancellor Rishi Sunak put in place had more deliberate targeting of poorer households and I think it’s pretty clear that any fiscal maneuver we have at the moment should be primarily aimed at them in instead of more broadly.”
Tory voters swing behind Truss
Ms Truss has taken a seven-point lead as prime minister against Rishi Sunak (27% to 20%) and a 26-point lead among 2019 Conservative voters (48% to 22%).
Research from Opinium found on all leadership qualities, 2019 Tories are more positive about Ms Truss than two weeks ago and more negative about Mr Sunak.
A third of all voters (34%) think the government should keep taxes and spending on public services where they are now, while 26% think there should be an increase in both.
Frontrunner denies video leak
Liz Truss has refused to say whether her campaign was involved in the leak of a video in which Rishi Sunak spoke about working to redirect funding from disadvantaged urban areas to more prosperous cities.
The Tory leader’s candidate was asked during a visit to the West Midlands if her team had anything to do with leaking her rival’s controversial comments.
She told reporters: “I am running a positive campaign.
“My campaign is about how we unlock the potential of Britain, how we get the economy going in these difficult times, how we get investment in great places like the West Midlands.”
Speaking in Southampton after a visit to the Isle of Wight today, Sunak said he “stands[s] absolutely” what he said, citing the island as an example of a community that feels it is not getting the support it needs under the funding formula.