Liz Truss has hit back at claims that her plans for an emergency tax-cutting budget would be an “electoral suicide note”, accusing Rishi Sunak’s supporters of spreading “portents of doom”.
Deputy Prime Minister Dominic Raab, who is backing the former chancellor in the Conservative leadership contest, said Ms Truss’s promise to scrap the increase in National Insurance would do little to help families struggling with soaring prices.
“What I care about is Britain being successful. I don’t agree with these portents of doom. I don’t agree with this declinist talk,” she said.
“I believe our country’s best days are ahead of us. And what I’m going to do, if selected as prime minister, is keep taxes low, get the economy growing, unleash the potential right across Britain. That’s what I’m about.”
Ms Truss has come under fire after she indicated there would be no more “handouts” if she became prime minister, despite warnings that average household energy bills could hit almost £4,000.
However – in a sideswipe at Mr Sunak’s decision to put up taxes while he was in the Treasury – she said the priority has to be reducing the tax burden in order to stimulate growth.
“What I am talking about is enabling people to keep more money in their own pockets,” she said.
“What I don’t believe in is taxing people to the highest level in 70 years and then giving them their own money back. We are Conservatives. We believe in low taxes.
“Of course we will need to deal with the circumstances as they arise. My fundamental principle is that people should keep more of their own money.
“We will see what the situation is like in the autumn, but I am committed to making sure people are supported and I am committed to growing the economy.
“We can’t get the economy growing if we have the highest tax rates for 70 years in this country.”
Mr Sunak has argued that cutting National Insurance would do little to help the most vulnerable, giving less than £60 to workers on the national living wage and nothing at all to pensioners.
A spokesman for his campaign said: “Liz Truss has doubled down, refusing five times to say she will provide direct support for British families and pensioners this winter.
“Liz’s plan will not touch the sides for the majority of British families this winter and pensioners will get no help whatsoever. It seems she is divorced from reality.”
Writing in The Times on Tuesday, Mr Raab said it is “bad politics”, that could prove “economically harmful and politically fatal”.
“If we go to the country in September with an emergency budget that fails to measure up to the task in hand, voters will not forgive us as they see their living standards eroded and the financial security they cherish disappear before their eyes,” he said.
“Such a failure will read unmistakably to the public like an electoral suicide note and, as sure as night follows day, see our great party cast into the impotent oblivion of opposition.”
Earlier, Mr Sunak signalled that he would be prepared to increase direct support for families, warning that they face an “extremely tough winter” ahead.
The former chancellor said he would aim to keep any one-off borrowing to an “absolute minimum” by seeking “efficiency savings” across Government departments.
His team said the approach would aim to replicate previous measures used to fund support for Ukraine.
This resulted in departments and devolved administrations being asked to find underspends from their capital budgets, which involves money spent on investment and things used to create future growth.