Tax cuts promised by Conservative leader favourite Liz Truss will not “fully solve” the cost of living crisis, a senior ally had admitted.
Rishi Sunak has seized on Truss’s rejection of cost of living “handouts” – arguing her tax cuts “won’t touch the sides” for families on low incomes, amid growing calls for an emergency budget.
Truss backer Brandon Lewis, the former Northern Ireland secretary, conceded that her promised tax cuts would not on their own “fully solve” the spiralling living costs.
Asked about Ms Truss’ tax plans, Mr Lewis told BBC Radio 4: “I appreciate it doesn’t fully solve the problem, this is a big, international, global inflation and energy price change that we’re facing – she also wants to bring forward an emergency budget.”
The ex-cabinet minister told the Today programme: “We will look to do whatever we can to help people – that’s what an emergency budget is about.”
“So rather than having handouts, what we do is have a low-tax economy that’s driving growth and therefore with people having more money in their pockets, they’re better placed to deal with some of the challenges that we see.”
Despite insisting that Truss would look at “further things” she could do to help, Mr Lewis repeatedly refused to say if those things would include any cost-of-living payments.
Asked nine times whether the potential PM would consider extra support payment, the former minister said: “That would be pre-judging a budget we’ve not had yet.”
Trusss has vowed to immediately scrap green levies on bill and reverse the national insurance hike, which Sunak brought in as chancellor to fund the NHS and social care, if she wins the race to succeed Boris Johnson at No 10.
But the Sunak campaign says the NI cut would be worth only £59 to those on the national living wage, criticising her “starry-eyed boosterism”.
“Liz’s plan to deal with that is to give a big bung to large businesses and the well-off, leaving those who most need help out in the cold,” the former chancellor wrote in The Sun.
Sunak added: “Worse still, she has said she will not provide direct support payments to those who are feeling the pinch most.”
Conservative party co-chairman Oliver Dowden, who is backing Mr Sunak, said that while Ms Truss was putting her emphasis on tax cuts, the former chancellor accepted the need for “bold, big interventions”.
While Sunak has said he would wait to see the increase in bills this autumn before setting out extra support, Dowden added: “There is no doubt that we do need an intervention of a considerable scale to deal with this.”
Truss has suffered a fierce backlash over disparaging remarks about “handouts” made at the end of last week, with the Bank of England forecasting 13 per cent inflation and average household energy bills predicted to reached almost £4,000.
“Of course I will look at what more can be done. But the way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts,” the foreign secretary told the Financial Times.
But her supporters claimed that the Tory leadership frontrunner’s comments had been “misinterpreted” – saying she would consider help during an emergency budget.
On Sunday trade minister Penny Mordaunt denied that Ms Truss had ruled out expanding direct payments. “It’s not that she’s ruling out all future help; that’s a misinterpretation of what she said,” said the former leadership rival
But Mordaunt said tax cuts would be Truss’ priority, as she referred to direct payments as “complicated”. She told Sky News: “It makes no sense to take money off of people and then to give it back in very, very complicated ways.”
The proposals of both candidates were attacked as “absolutely inadequate” by Margaret Thatcher’s former energy secretary Lord Howell of Guildford.
The contenders’ promises of future relief were like Marie Antoinette saying “let them eat cake”, said the Tory peer on Sunday.
Anti-poverty campaigners and experts have told The Independent that the new PM must immediately double the £15bn support package announced by Mr Sunak in May in order to avert terrible hardship this winter.
Two thirds of Britons think the government should prioritise tackling the soaring rate of inflation before introducing tax cuts, a poll has found.
A YouGov poll found that 64 per cent of voters thought the next prime minister should first battle the rising living costs, while 17 per cent favoured tax cuts.
