Foreign Secretary Liz Truss and Rishi Sunak’s leadership campaigns went head-to-head today in a growing tax war that could decide who succeeds Boris Johnson.
Shortly before Ms Truss officially unveiled her leadership bid, one of her closest allies, Kwasi Kwarteng, launched a stinging attack on former chancellor Mr Sunak’s economic plan claiming his tax rises did not “make any sense whatsoever”.
One of Mr Sunak’s key campaign supporters, former housing secretary Robert Jenrick, hit back immediately accusing rival leadership contenders of “promising entirely unfunded tax cuts in the heat of a Conservative leadership election”. The clash came as:
- Chancellor Nadhim Zahawi said he would slash government department headcount by 20 per cent, which would almost certainly lead to thousands of job losses in Whitehall, as part of his tax-cutting agenda.
- Ex-foreign secretary Jeremy Hunt insisted his posh background did not mean he was out of touch with ordinary voters. He said he would appoint as his deputy the North West Tory MP Esther McVey, who would act as the John Prescott to his Tony Blair.
- Home Secretary Priti Patel was still torn over whether to enter the race.
- International trade minister Penny Mordaunt had secured the second highest number of Tory MP endorsements with 21 and vowed “education, training and opportunity will drive my government”.
- Former soldier Tom Tugendhat MP, who has so far secured 15 endorsements, vowed to “lower taxes across every aspect of society” if elected leader.
- Environment Secretary George Eustice backed Transport Secretary Grant Shapps as able to “deal with whatever is thrown his way” given the crises in transport he has dealt with including during the Covid pandemic.
- Ex-equalities minister Kemi Badenoch has so far secured the backing of 12 MPs and was most recently endorsed by former culture minister Julia Lopez.
- The pound fell early on Monday amid market concerns over political uncertainty and the UK’s gloomy economic outlook. Amid accusations of a “zombie government”, former cabinet secretary Lord Butler said it was the civil service’s job to keep the show on the road.
The focus of the leadership contest was sharply on tax policies on Monday.
Former Chief Secretary to the Treasury Ms Truss said in her launch video: “As prime minister, I will lead a government committed to core Conservative principles, low taxes, a firm grip on spending, driving growth in the economy, giving people the opportunity to achieve anything they want to achieve regardless of their background.”
Her ally Mr Kwarteng laid into Mr Sunak’s tax rises to provide billions more for the NHS and social care.
“There is no way that we are going to increase this economy and help our futures for our children without trying to incentivise some investment and we don’t do that by raising taxes to the highest level since 1949,” he told BBC Radio 4’s Today programme. “That does not make any sense whatsoever.”
On whether Ms Truss would make spending cuts, he said: “You are right there need to be spending reductions but the main bugbear, the main enemy at the moment is anaemic growth.”
Mr Jenrick said: “You have got to be very cautious about promising entirely unfunded tax cuts in the heat of a Conservative leadership election. What the public are crying out for now is for the Conservative Party to demonstrate seriousness of purpose, professionalism and a clear plan for the economy.”
Eleven candidates have now entered the leadership race with a variety of positions on tax cuts, with some like Mr Hunt focusing on reductions first for businesses to drive economic growth.
