Truss and ally Sunak hit commercial hit on tax plan ahead of Sky debate

An ally of Rishi Sunak has suggested that Liz Truss’ “dangerous” tax-cut plan risks causing inflation, as Tory leadership candidates trade with each other ahead of the next televised debate. follow.

Conservative MP Mel Stride, who chairs the Commons Treasury Committee, warned large-scale non-refundable tax cuts could make matters “significantly worse” and insisted there needed to be a way. “measured” approach.

However, former Tory chancellor Sajid Javid defended Ms Truss’ plans and said they would not necessarily fuel inflation or boost borrowing.

Secretary of State Truss has pledged to “start tax cuts from day one” with a new budget and spending review that will reverse April’s national insurance rise and next year’s corporate tax hike from 19% to 25%.

By contrast, Mr. Sunak has branded himself as the financially conservative candidate who will “cut taxes to boost growth” in a “responsible” manner.

The former prime minister has stated that his opponent to become the next prime minister will continue to push interest rates, increase mortgage payments, with her plan.

Mr Sunak’s warning comes as the Bank of England is forecast to raise interest rates to a near three-decade high on Thursday, from 1.25% to 1.75%.

A Bank of England announcement is scheduled for midday, with experts warning inflation could peak at 15%, adding to an already stinging cost of living crisis with rising prices. ladder.

But Ms. Truss countered by saying “we can’t tax our way to growth” and stressed that her plan would not raise prices any further.

Ms Truss and Mr Sunak are expected to be further challenged on their approach when they join the Sky News debate from 8pm on Thursday.

Mr Stride, Chairman of the Commons Treasury Committee, told BBC Radio 4’s Today: “What we have to do now is avoid causing inflation and making the problem worse.

“One of the ways you can make matters significantly worse is to conduct massive, non-refundable, tens of billions of pounds in tax cuts.”

“Financially, the big decision here is tax,” he added. You have to do it thoughtfully and at the right time, but can’t start moving forward with the tens of billions of unrefundable tax cuts right now.

“I think that would actually be quite dangerous.”

He also stressed that Mr Sunak would “absolutely not” give in despite polls showing he was a long way behind Ms Truss.

Former leader of hope Mr Javid, who endorsed Ms Truss on Wednesday, warned not cutting taxes would be “riskier”.

Of Ms Truss’ plan, he told Times Radio that the Office for Budget Responsibility forecast has about £31bn of “financial gaps” by 2024/25 “so that’s the first thing you can do.” use it to cut taxes now”.

He added that reducing the planned corporate tax increase from 19% to 25% in April will not affect the inflation figures.

“There is no inflation without tax increases,” he said.

“I do not support this argument that the things Liz is suggesting will somehow lead to higher inflation. In the long run, they will help improve the economy and that’s the most important thing. “

Former Conservative prime minister Lord Lawson of Blaby said Mr Sunak had been “guided by the principles of Thatcherism” in his bid to ensure the current generation “pays its own way” rather than The next “burden” with larger debt.

Writing in the Telegraph, Lord Lawson added: “While Liz Truss has many qualities, her plans now include around £60 billion in unpaid tax/expenditure cuts – and her message Her reassurance about the associated inflation risk is, to me, unpleasantly reminiscent of the mistakes of the Tory government of 50 years ago. “

He reflects that Tory prime minister Anthony Barber’s budget in 1972 was popular but led to “a multi-year inflationary nightmare”.

In a separate development, Attorney General Suella Braverman compared the “field” of diversity, equality and inclusion to “the witch-finders of the Middle Ages” as she supported Ms Truss’ continued work. to combat the “cruel identity politics”.

Ms. Braverman, writing in the Daily Mail, said she had asked officials to cancel equal training in her department.

She said: “I was appalled to find out that hundreds of Government lawyers spent almost 2,000 hours of their taxpayer-funded time last year attending lectures on ‘vigilance’. terminal illness’, various ‘life experiences’ and ‘how to be an upright ally’, courtesy of lesbian, gay, bisexual and transgender rights charity Stonewall. “

Ms Braverman added: “Well, I told my officials to get it removed. We really have to get serious about taking this divisive mindset and calling it: a new religion with a new priesthood.

“Some people fervently believe that. Like the witch-seekers of the Middle Ages, they dressed as a judge and never tire of wiping out unbelievers. “