Rishi Sunak and Liz Truss face more hustings on Friday
(Picture: PA Wire)The new prime minister will have to navigate the Tory party through a “collapse in public confidence” during the cost of living crisis, a senior Tory MP warned on Friday.
Jake Berry, chairman of the influential Northern Research Group, said the new Conservative leader would be under pressure to boost the stalling economy and cap soaring bills.
But he admitted that any plans to help struggling households put in place by Liz Truss or Rishi Sunak would come with a hit to Government finances.
Forecasters predict average annual energy payments could rise to more than £3,500 in October at a time when fuel and food prices are also skyrocketing and inflation is in double figures.
Mr Berry, who is supporting Ms Truss, told Sky News: “If you are talking about getting money to families you can do one of two ways. You can either just give them money or you can do it through tax cuts. Whichever way you do it, there is a cost to the public purse.
“So in truth, the real difficulty is about how you combine both supporting families with creating economic growth to increase what they call the fiscal headroom in the economy.
“And it is my view that Liz Truss’ plan to cut taxes to help ordinary working families is the right one to create economic growth and help us navigate our way through this collapse in public confidence that we’re seeing.”
As the candidates prepare for another hustings in Manchester on Friday evening, Ms Truss has rocketed ahead of Mr Sunak in the polls after promising £30 billion in tax cuts.
However, the pledge was branded “unrealistic” unless they are matched by spending cuts, the Institute for Fiscal Studies think tank warned.
The latest survey by ConservativeHome showed the Foreign Secretary 32 points ahead of her rival with the party membership and on track to succeed Boris Johnson.
But supporter Grant Shapps said Mr Sunak should not stand aside and compared the former chancellor’s chances to the unexpected Brexit referendum result.
Transport Secretary Mr Shapps added: “I think it would be a very good idea for those who are voting in this contest to complete the vote.
“As I say, it is only just over a fortnight’s time and we will know the answer to that.
“In the meantime, many of us are working very hard to make sure that services are available this summer.”
