Sunak and Truss argue over tax plans ahead of debate

Rishi Sunak has launched a new attack on Liz Truss’ tax cut plans ahead of the couple’s next debate in their quest to become prime minister.

The former chancellor said his rival foreign secretary in the race for the Conservative leadership will continue to raise interest rates, boosting mortgage payments, in line with her plans.

His warning came as the Bank of England is expected to raise interest rates to its highest level in almost three decades on Thursday, from 1.25% to 1.75%.

The Bank of England announcement is scheduled for noon and experts warn inflation could peak at 15%, exacerbating an already painful cost-of-living crisis with rising prices.

Close

Rishi Sunak speaks at the All Nations Center in Cardiff during Wednesday Mass Actions (Jacob King/PA)

Meanwhile, the pair are also due to face off in a debate on Sky News at 8:00 pm on Thursday.

Mr Sunak has faced attacks from Ms Truss for overseeing tax increases when she ranked 11th during the pandemic as she promises a more drastic plan to cut them.

He has pushed for tax cuts but argues that inflation must be brought under control before major changes can be made.

The former chancellor stressed that there are “decisive differences” between their plans, “because timing is everything.”

“If we rush ahead with premature tax cuts before inflation is under control, all we will do is give with one hand and then take with the other,” he said in a statement.

“It will spur inflation and raise interest rates, pushing up mortgage payments. And that would mean that every pound people put back into their pockets is nothing more than an upfront payment for rising prices.

“A political avenue devoid of hard choices may evoke warm feelings in the short term, but it will be cold comfort when it allows Labor to take 10th place and sends the Conservative Party into the wilderness of opposition.”

Ms. Truss countered, saying “we can’t tax our path to growth” and insisting that her plans would not drive prices up further.

“My economic plan will get our economy moving by reforming the supply chain, removing EU regulation from our law books and cutting taxes,” she said.

“Introducing bold supply-side reforms is the way we can manage inflation in the long term and ensure sustainable growth. Modest tax cuts, including the repeal of a potentially damaging corporate tax increase that hasn’t even gone into effect, don’t lead to inflation.”

Thursday’s debate followed previous face-to-face meetings last week held on TalkTV on July 26, which were halted after host Kate McCann passed out off-screen while Ms Truss spoke.

Ms McCann later said she felt “a little embarrassed, a little bruised, but glad to be back and all right”.

Ms Truss was bolstered on Wednesday by two polls that showed her overwhelming lead over Mr Sunak after the pair took part in a heist in Cardiff.

Close

Liz Truss speaking during a heist in Cardiff (Jacob King/PA)

She edged out Mr. Sunak by 34% in a YouGov poll of party members before a poll for website ConservativeHome released Wednesday gave her a 32-point lead.

At the televised event, she also accused the media of “misinterpreting” her £8.8bn broken political pledge to cut the public sector payroll, with Mr Sunak applauding the reversal.

She also renewed her attacks on Scottish First Minister Nicola Sturgeon after stating she would ignore “getting attention” and launching a new attack on Sturgeon’s Welsh counterpart.

Ms Truss called Welsh First Minister Mark Drakeford a “low-energy version of Jeremy Corbyn”, the former Labor leader, and said his successor, Sir Keir Starmer, was a “plastic patriot”.