LIZ Truss’s tax cuts “won’t touch the sides” of the cost-of-living crisis for millions this winter, Rishi Sunak has said.
The former Chancellor accused his rival in the Tory leadership contest of planning to “give a big bung to large businesses and the well-off” instead of bringing down household bills.
“We need clear-eyed realism, not starry-eyed boosterism,” he said.
Mr Sunak, who is trailing Ms Truss in the fight to replace Boris Johnson in Number 10, made his strident comments in an article in the Sun newspaper today.
Ms Truss has said cutting tax will be her priority if she becomes PM, starting with a reversal of the National Insurance hike, cancelling a corporation tax rise, and a moratorium on green energy levies on domestic energy bills.
Mr Sunak has warned the uncosted measures will mean more Government borrowing and push up inflation – already forecast to hit 13.3 per cent this year- as well as interest rates.
In his article, he said: “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.
“Worse still, she has said she will not provide direct support payments to those who are feeling the pinch most.
“Scrapping the health and social care levy [on National Insurance] will give the average worker around £170. “But someone on the national living wage will get less than £60 for the year. Pensioners will not get a penny.
“And her corporation tax cuts don’t benefit small businesses – they just put money back in the coffers of the biggest companies with the largest profits. These tax cuts simply won’t touch the sides. We need clear-eyed realism, not starry-eyed boosterism.”
Ms Truss said at the weekend she wanted tax cuts not “handouts” to help people this winter.
She told the Financial Times: “: “The way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts”.
After a backlash to the idea on the grounds it would help the better off, not the poorest who don’t pay tax, her team backtracked and said Ms Truss was not ruling out direct support.
Northern Ireland Secretary Brandon Lewis told BBC Radio 4 today: “We will look to do whatever we can to help people – that’s what an emergency budget is about.
“She’s (Ms Truss) 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.
“So rather than having handouts, what we do is have a low-tax economy that’s driving growth and therefore with people having more money in their pockets, they’re better placed to deal with some of the challenges that we see.”
But former Conservative Party co-chairman Oliver Dowden, who is supporting Mr Sunak for leader, said “bold and direct action in response” to the economic situation was required.
He told Sky News: “Conservatives are perfectly capable of dealing with this situation ourselves, and you’ve seen that Rishi Sunak did that when he was chancellor.
“He announced an enormous amount of support for people in expectation of this rise in energy bills, up to £1,200 for those on the lowest incomes.
Taking aim at Ms Truss’s plan, Mr Dowden added: “It’s that kind of scale of direct intervention that is required and I think just proposing to cut the national insurance contribution – which will only help people on the lowest incomes working full-time on the national living wage by less than £60 – is not sufficient to this scale of challenge.”
Asked if there should be an emergency budget, he said: “Well I think we need to take bold and direct action in response to this and I think you’ve seen from Rishi Sunak when he was chancellor, both in response to the furlough scheme, when he came up with that in a matter of days, that saved millions of jobs, and the action he and Prime Minister Boris Johnson took earlier this year, it’s that kind of scale of intervention that is required.”