Rishi Sunak has criticised Liz Truss’ plans for tax cuts ahead of their next live TV debate on Thursday evening.
The former chancellor said his rival in the race to be leader of the Conservative Party and Prime Minister would further drive up interest rates and increase mortgage payments with her plans. His warning came as the Bank of England was forecast to raise interest rates to the highest level in nearly three decades on Thursday, from 1.25% to 1.75%.
A Bank of England announcement is scheduled for midday, with experts warning that inflation could peak at 15%, worsening the already painful cost-of-living crisis. Meanwhile, the pair are also due to face off in a head-to-head debate on Sky News at 8pm on Thursday.
READ MORE: Wanted man on roof 'demands double pepperoni pizza' in police standoff
Sunak has faced attacks from the Foreign Secretary for overseeing rising taxes during the pandemic, as she pledges a more radical plan to reduce them. He insisted he does want to see taxes come down but argues inflation must be brought under control before making major changes.
The former chancellor stressed there are “crucial differences” between their plans “because timing is everything.” He said: “If we rush through premature tax cuts before we have gripped inflation all we are doing is giving with one hand and then taking away with the other.”
“That would stoke inflation and drive up interest rates, adding to people’s mortgage payments. It would mean every pound people get back in their pockets is nothing more than a down payment on rising prices.
“A policy prospectus devoid of hard choices might create a warm feeling in the short term, but it will be cold comfort when it lets Labour into Number 10 and consigns the Conservative Party to the wilderness of opposition.”
Truss countered by saying “we cannot tax our way to growth” and insisted her plans would not drive up prices further. She said: “My economic plan will get our economy moving by reforming the supply side, getting EU regulation off our statute books, and cutting taxes.”
“Delivering bold reforms to the supply side is the way we’ll tackle inflation in the long run and deliver sustainable growth. Modest tax cuts – including scrapping a potentially ruinous corporation tax rise that hasn’t even come into force – are not inflationary.”
The Liz Truss campaign received another high-profile endorsement on Wednesday as former leadership hopeful Sajid Javid threw his weight behind the Foreign Secretary. Javid, whose resignation as Health Secretary minutes before Sunak quit as chancellor triggered the cascade that forced Boris Johnson to quit, warned that “tax cuts now are essential” as he backed Truss’ plans.
In an article for The Times, Javid said the nation risks “sleepwalking into a big-state, high-tax, low-growth, social democratic model which risks us becoming a middle-income economy by the 2030s.”
On Wednesday, Truss was boosted by surveys suggesting a healthy lead over her rival after the pair took part in a hustings in Cardiff. A YouGov poll of Tory party members and a survey for the ConservativeHome website both put her more than 30 points ahead of Sunak.
The televised event also saw her blame “the media” for having “misinterpreted” her abandoned £8.8 billion policy pledge to cut the public sector wage bill, with Mr Sunak welcoming the U-turn.
READ NEXT:
- Love Island's Gemma Owen greeted by family at airport as she returns home from villa
- Schoolgirls raped and abducted by vile gang
- Ex-BBC radio presenter sexually assaulted boy being held down in car
- DVLA asks older drivers to renew their licence immediately
- Full list of bus routes to be changed and cut across the Liverpool City Region
