He Business Secretary has said current economic policy “won’t cut it” and the Sink campaign is warning against “magical solutions” as tax is a key dividing line in the Tory leadership race.
Foreign Secretary Liz Truss and former chancellor Rishi Sink, the two front-runners to become the next prime minister, will be put through their paces again at the Tory hustings in Eastbourne on Friday evening.
The economy and the rising cost of living have been central to the debate so far, but on Thursday the Bank of England warned that Britain faces two years of falling household incomes, inflation will top 13 percent, and The economy will plunge into the longest recession since the financial crisis.
Business secretary and Truss campaign supporter Kwasi Kwarteng hit out at the former chancellor’s record, saying the tax was “insult to injury”.
He told Sky News: “I think our problem is very simple. I think we have inflation which is, as you say, squeezing people’s incomes, but we also have an increasing tax burden. .
“I’ve never understood why if we’re going to help people? How are we going to help people by taxing them? Especially when their everyday shop, their expenses are going up.
What is very clear to me from what the Bank of England said yesterday is that simply continuing our economic policy at this point will not ease it, it will not help us get out of it. difficult.”
He added: “To tell people that your real income is going to be squeezed and I’m going to raise your taxes, I think that’s just adding insult to injury. You’re not really dealing with the problem. There are, and the way to deal with this problem is to have a slightly looser fiscal approach.
But former cabinet minister Liam Fox, a supporter of Mr Sink, told the broadcaster that borrowing money to implement the tax cuts would now take a “risk” with the economy, and warned against a “magic bullet”.
The last time we actually, in a situation like this, cut taxes, borrowed money for tax cuts, was under Ted Heath and it didn’t work out very well.
Dr Fox said: “There is an element of global inflation to deal with. The question is how do we do that? I think you deal with inflation first. Get debt under control. Then you get the economy growing.” Take steps to help. And then you start thinking about tax cuts.
He described the global factors at play, saying: “The question in terms of leadership is whether we maintain the traditional conservative response to this or whether we try to do something completely different and risk with the economy. Take the money?
“The last time we actually, in a situation like this, cut taxes, borrowed money for tax cuts, was under Ted Heath and it didn’t work out very well.”
He continued: “It’s not going to be easy, and I think that’s a key difference between the candidates in this election because it’s … do you really say it’s going to be difficult and be honest with the British people? Or do you Pretend there are magical solutions?”
Asked about Ms Truss’ claim that a recession was not inevitable, Dr Fox said: “I think it is inevitable given what is happening in the global economy.”
Former housing secretary Robert Jenrick, who is backing Mr Sink, told BBC Radio 4’s Today programme: “Two tax increases that have been the subject of debate in recent weeks – one, the reduction in NICs which The top 15% of earners will benefit and secondly, not going ahead with a rise in corporation tax for the 30% of big companies, which support your most profitable businesses like BPs or Persimmons – which Doesn’t feel like the right focus right now.”