Foreign secretary Liz Truss on Thursday slammed Tory leadership rival Rishi Sunak as “the continuity economic policy candidate”, claiming he took the UK economy in the “wrong direction” when he was chancellor.
In a sign of the gloves-off nature of the final contest to become leader of the Conservative party, Truss promised to hold an emergency tax-cutting budget within days if she were to become prime minister, shrugging off accusations of fiscal irresponsibility.
At the moment Truss is the bookies’ favourite after opinion polls gave her a strong lead over Sunak, who has been forced to defend tax rises announced while he was chancellor.
Truss’s plans to cancel increases in national insurance and corporation tax, while taking “environmental levies” off energy bills, would cost more than £30bn a year, although her team argues this can be found from headroom within Treasury forecasts.
“The tax cut plans are affordable within our current fiscal rules, so we would still see debt falling after four years,” she told BBC Radio 4’s Today programme.
Asked if she was worried that her proposed tax cuts would increase inflation — which is the consensus view of economists — Truss said the opposite was true.
She cited an article by Brexit-supporting economist Patrick Minford in the Daily Express to suggest that her tax plans would instead decrease inflation. “My tax cuts are not inflationary, the reason is that reducing national insurance, reducing corporation tax, increases the supply side of the economy,” she said.
The foreign secretary said there was an unhealthy consensus in the Treasury, among economists, the Financial Times and other outlets — “peddling a particular type of economic policy for the last 20 years” — which had not delivered.
“What I know about the Treasury from having worked there is that they do have an economic orthodoxy and they do resist change,” she said. “And what people in Britain desperately need now is change.”
Truss said that it was not a time for “business as usual” in Downing Street. “We need somebody with the toughness, the grit, who is prepared to take on the Whitehall machine and drive through change.”
Meanwhile, Sunak told the Daily Telegraph on Thursday that he too believed in “cutting taxes and bureaucracy” but only once the government has achieved a foundation of low inflation and sound public finances.
“My values are Thatcherite. I believe in hard work, family and integrity. I am a Thatcherite, I am running as a Thatcherite and I will govern as a Thatcherite,” he said.
In an attack on Sunak’s record, writing in the Daily Mail, Truss said the government had been “going in the wrong direction on tax, with the tax burden at its highest in 70 years”.
Although Truss, who has served in the cabinet under David Cameron, Theresa May and Boris Johnson, campaigned for the UK to stay in the EU in 2016, she made it through to the final ballot after scooping up the votes of many rightwing Eurosceptic Tory MPs.
On Thursday, she said she had made the wrong call by opposing Brexit. “I was wrong and I’m prepared to admit I was wrong. Some of the portents of doom didn’t happen, and instead we have actually unleashed new opportunities.”
Truss pointed to her record in office saying she was tough under pressure. “In the jobs I’ve done I’ve dealt with some of the worst floods for a generation, some of the worst prison riots since Strangeways, the worst war in Europe.”