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Truss and Sunak face mounting pressure over cost of living crisis plans

08 Aug 2022 5 minute read
Liz Truss(L) Photo Stefan Rousseau- Rishi Sunak Photo Dominic Lipinski PA Images

Liz Truss and Rishi Sunak face mounting pressure to explain how they will help households with the spiralling cost of living and the “financial timebomb” due to explode in the autumn.

Their economic response to the crisis has emerged as the main battleground in the bid to be the next prime minister, with Ms Truss under fire from Mr Sunak’s allies for suggesting there would be no “handouts” and subsequently playing down the comment.

The row followed the Tory leadership favourite telling the Financial Times she would “look at what more can be done” in the light of warnings from the Bank of England about the longest recession since the financial crisis and inflation soaring to over 13%.

But she added: “The way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts”.

Mr Sunak quickly condemned it as “simply wrong to rule out further direct support” for struggling families this winter.

Misinterpreted

Penny Mordaunt, a former Tory leadership contender who has thrown her weight behind Ms Truss, insisted she had been misinterpreted.

She told Sky News: “It’s not that she’s ruling out all future help, that’s a misinterpretation of what she said.

“What she is looking at though is enabling people to keep more of the money that they earn”.

But supporters of Mr Sunak accused his rival of another U-turn after she last week rowed back on proposals to cut public sector pay outside London.

Former chief whip Mark Harper tweeted: “Stop blaming journalists (again) – reporting what you actually say isn’t ‘misinterpreted’.

“2nd time in just 5 days. This kind of thing happened under the current PM & hugely damaged trust in us all.

“So just what does ‘not giving out handouts’ mean then?”

The former chancellor’s camp also rounded on Ms Truss’s plans to use a September emergency budget to immediately reverse the national insurance rate rise brought in by Mr Sunak when he was chancellor.

Ms Truss wrote in the Sunday Telegraph: “I would use (an emergency budget) to immediately tackle the cost-of-living crisis by cutting taxes, reversing the rise on national insurance and suspending the green levy on energy bills.”

Former Tory party co-chairman Oliver Dowden said the Foreign Secretary’s proposed tax cuts were “insufficient” to help low-income workers and would disproportionately benefit the better-off.

The Sunak supporter told BBC News: “You’re going to see energy bills going up to almost £4,000 and if you look at the idea of the tax cuts, this idea of reversing the national insurance contributions, that’s only going to benefit someone working full time on the national living wage by less than £60.

“Contrast that with whoever the prime minister is, they’re going to get a benefit of about £1,800.

“So this isn’t the way to help people through this very difficult period.”

Fuel bills

Mr Sunak would go further than the additional £1,200 he offered to the poorest in society as chancellor, his allies suggested. He has also pledged to axe VAT on fuel bills.

Tory MP Damian Hinds conceded the existing package was not enough in these “extraordinarily difficult times”.

He told Sky News: “Things have been getting worse even since that was put into place in terms of projections for energy bills… and he’s been clear that more may well be needed and and he is ready to do that as required.”

There are growing calls for the new PM to urgently increase the amount of support available to vulnerable households, with a report commissioned by former prime minister Gordon Brown suggesting Government help has failed to address their needs.

Mr Brown pressed both candidates to agree an emergency budget with Boris Johnson this week or risk “condemning millions of vulnerable and blameless children and pensioners to a winter of dire poverty”.

“The reality is grim and undeniable: a financial timebomb will explode for families in October as a second round of fuel price rises in six months sends shock waves through every household and pushes millions over the edge,” the Labour former prime minister wrote in Sunday’s Observer.

His report found existing Government support for low-income households has fallen short of offsetting the losses they face, with some families up to £1,600 worse off a year.

The additional £1,200 offered to the poorest in society this year will fail to compensate for three major blows to their income from October 2021 to October 2022, the analysis suggests.

Mr Brown lamented the “vacuum” at the heart of Government created by the Prime Minister and Chancellor being on holiday and the Tory leadership candidates being on the campaign trail, telling BBC Radio 4’s The World This Weekend that not enough was being done to address “a moment when a lot of the gains of the last 30 or 40 years have been lost”.

Ms Truss and Mr Sunak continue to criss-cross the country seeking support from Tory members to be elected the next party leader and prime minister. Voting has begun, with the result to be announced on September 5.


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Hogyn y Gogledd
Hogyn y Gogledd
1 month ago

The UK is supposed to be the sixth richest country in the world.

So where is all the money?

Kerry Davies
Kerry Davies
1 month ago

According to official figures that show a breakdown of workers’ wages by industry, staff in the finance and insurance sector were paid 10.6% more than a year ago, compared with 1.4% in the arts, leisure and entertainment industry. Then you have the Kurt Vonnegut theory; “I sometimes wondered what the use of any of the arts was. The best thing I could come up with was what I call the canary in the coal mine theory of the arts. This theory says that artists are useful to society because they are so sensitive. They are super-sensitive. They keel over like canaries… Read more »

David
David
1 month ago

In offshore tax havens!

One of the two witnesses
One of the two witnesses
1 month ago

Maybe billionaire Sunak and multi-millionaire Truss could tell us.
Welcome to the Kleptocracy.

Jim
Jim
1 month ago

A lot of it is illusory, tied up in assets that only maintain their value if supported by economic activity driven by cheap and abundant energy supplies. Take away said cheap and abundant energy and the whole house of cards falls. This what we are now seeing. This pair are squabbling over how to arrange the deck chairs on that fated ship and ignore that other old adage; if you can’t defend it, you don’t own it. Without cheap energy there is nothing to protect those assets. Should have taken notice of that 1972 book “The Limits to Growth” and… Read more »

Dr John Ball
Dr John Ball
1 month ago

Truss and Sunak can go at each other till hell freezes over for all I care.

What amuses me in this report is the incredible hypocrisy of Gordon Brown. His loosening of the banking rules led to the 2008 banking crisis and then in 2014 he rushed to Scotland with prophecies of untold riches in return for a no vote.
He’s got some nerve!

Kerry Davies
Kerry Davies
1 month ago

I have just seen a Rishi Sunak video in which he promises to review every EU law on our books and shred those that are unhelpful, “all 2,400 of them”. Bad news Boyo, Thomson Reuters did the research years ago and found that there are; “A total of 52,741 laws (which) have been introduced in the UK as a result of EU legislation since 1990.” Before the referendum I used Commons Library stats which indicated that if Parliament sat 7 days a week for 52 weeks a year they might get it done in 45 years …. but only if they did… Read more »

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