Liz Truss has said an £8.8bn black hole in her savings budget caused by her abandoning a policy to cut public sector wages was not part of her “central costings” for funding a range of spending pledges, as she suggested the policy had been a “mistake”.
She also defended her stance on Brexit as a former remain supporter, claiming that the disruption she was concerned about prior to the referendum did not happen, despite the long queues recently seen at Channel crossings at the start of the school holidays.
Quizzed for the first time in front of Conservative members on a controversial policy that she was forced to U-turn on earlier this week, the frontrunner in the Tory leadership race said she never intended to slash the pay of teachers and nurses.
She made the comments despite her campaign having announced on Monday night a policy designed to reduce expenditure on civil service staff outside London.
“It was misinterpreted … by the media,” Truss told a crowd of Tory members in Cardiff, for the third hustings of the campaign.
“It was never intended to apply to nurses, doctors and teachers. So I wanted to clear the matter up straight away. And I have been very clear. We’re now not going ahead with that policy.
“It wasn’t a central part of my policy platform. And I’ve been clear that it is not happening.”
Truss, whose campaign received a boost earlier on Wednesday with the backing of former health secretary Sajid Javid, was pressed on how she would fill the shortfall of what her campaign estimated would equate to £8.8bn in savings. Truss said: “This is not part of my central costings.”
She said her financial pledges were scrapping the national insurance rise, keeping corporation tax low and putting a temporary moratorium on the green levy, which is added to domestic energy bills.
“Those policies will cost roughly £30bn and they will be funded out of general taxation,” she said.
“And we’ll still be able to see the debt falling after three years. Now the policy you’re referring to was something that was much longer term. It wasn’t about the immediate term. But as I’ve said, we’re not going ahead with it.
“It’s not happening and I’ve been very clear about that. I’m somebody who, when things are misinterpreted, when mistakes are made, I’m honest about that.”
Her rival, Rishi Sunak, said cutting workers’ pay was un-Conservative and he was glad Truss had changed her mind.
“I don’t think launching a spree of unfunded promises costing tens and tens of millions of pounds is the sensible thing to do,” he said.
Sunak said cutting taxes too quickly with unshackled spending commitments “risks making the situation worse” and “risking it lasting far longer”.
He won the support of two former cabinet ministers who served under Margaret Thatcher.
Michael Howard, a former Tory party leader, introduced Sunak on Wednesday night, saying Thatcher hated inflation, increased borrowing, unfunded tax cuts, and those who told people what they wanted to hear rather than the truth. “So does Rishi Sunak,” he said repeatedly.
Nigel Lawson, Thatcher’s former chancellor, said Ted Heath’s “dash for growth” policy contributed to inflation escalating out of control in the 1970s and Truss’s pledges were “uncomfortably reminiscent of the missteps of the Tory government of 50 years ago”.
Elsewhere during the Cardiff hustings, Sunak appeared open to scrapping inheritance tax, telling an audience member: “It is something we should look at.”
He did offer praise for Truss, saying they were “members of the same family” and whoever won would remember their real opponent was Keir Starmer.
Meanwhile, Truss doubled down on her criticism of Scottish first minister Nicola Sturgeon, accusing her of being “grossly irresponsible” by using the “entire resources” of the Scottish government to “run an independence campaign – grossly irresponsible”.
She also turned her fire on Welsh first minister Mark Drakeford, calling the Labour politician “the low-energy version of Jeremy Corbyn”.
In her own attempt to avoid further blue-on-blue attacks, Truss said she wished she had participated in fewer TV debates to avoid the Conservative leadership hopefuls airing their “dirty linen in public”.
Asked about her previous membership of the Liberal Democrats and her support for remain, Truss said: “I’ve always said that if we weren’t part of the European Union I wouldn’t want to join it. But I was concerned about some of the disruption. The fact is that disruption didn’t happen. And since the Brexit vote I’ve done more than most people in government to deliver on the opportunities of Brexit.”
Voting in the leadership race is under way for around a month, with the winner to be announced on 5 September.
