UK PM race: Sunak, Truss feel heat over cost-of-living crisis

The race to elect a new Conservative Party leader, who will take charge as British Prime Minister early next month, heated up on Monday as the two finalists – Rishi Sunak and Liz Truss – clashed over their proposals to tackle the soaring cost-of-living crisis across the country.

The issue of inflation and how best to curb it has emerged as the main battle line in the race to 10 Downing Street, with both candidates offering different approaches. While Truss has pledged immediate tax cuts if elected, Sunak has promised more targeted support for the most vulnerable households and tax cuts further down the line.

A fresh row brewed out over the weekend after Foreign Secretary Liz Truss told ‘The Financial Times’ that her plan to lower taxes rather than offer handouts was more Conservative. This prompted an immediate rebuke from former Chancellor Rishi Sunak that it is "simply wrong to rule out further direct support" for struggling families this winter.

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“Families are facing a long, hard winter with rising bills. Yet 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,” Sunak writes in ‘The Sun’.

“Worse still, she has said she will not provide direct support payments to those who are feeling the pinch most. We need clear-eyed realism, not starry-eyed boosterism. That means bolder action to protect people from the worst of the winter. I have the right plan and experience to help people through,” he said.

Supporters of Truss hit back to say her remarks over the weekend had been “misinterpreted”.

"What she has, I think, rightly challenged is the wisdom of taking large sums of money out of people's pockets in tax and then giving some of that back in ever more complicated ways," said Trade Minister Penny Mordaunt, a supporter of the Foreign Secretary.

"She's willing to do more to help people but her focus is around doing it in a way that puts more money in people's pockets, creating a high-growth economy with higher wages, more people in work," added Northern Ireland Secretary Brandon Lewis, another Truss supporter.

While Truss has pledged a package of tax cuts worth GBP 30 billion, which Sunak has argued would increase inflation and only save lower earners GBP 59 a year. However, both candidates are feeling the heat on the issue as the UK economy is expected to plunge into a year-long recession as inflation goes beyond 13 per cent later this year, according to the Bank of England forecasts from last week.

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Former Labour British Prime Minister Gordon Brown, himself an ex-chancellor, warned that the cost-of-living crisis is too serious for things to wait another few weeks until a new Prime Minister is in place.

He is calling for the Cabinet Office Briefing Room A (COBRA) emergency committee to convene in "permanent session" right away and is also calling for Parliament, which is on summer recess, to be recalled as a matter of urgency unless outgoing Prime Minister Boris Johnson and both Tory leadership candidates can agree on an emergency budget in the days to come.

"Even if Boris Johnson has now gone on holiday, his deputies should be negotiating hard to buy new oil and gas supplies from other countries and they should be urgently creating the extra storage capacity that we currently lack," Brown writes in ‘The Daily Mirror’.

Supporters of the British-Indian former finance minister in the race are urging Conservative Party members, who will be voting in postal and online ballots during the course of this month, to judge Sunak by his record of supporting families through the COVID pandemic crisis as Chancellor.

Meanwhile, the bookmaker odds continue to hold strongly in favour of Truss, with the bookie odds aggregator Oddschecker showing the Foreign Secretary way ahead at 87 per cent and Sunak at 13 per cent odds of winning.