Conservative MPs will cull the five-strong field hoping to succeed Boris Johnson by one more on Monday, as the International Monetary Fund cautioned the candidates over their race to announce sweeping tax cuts.
Following an often bruising debate on ITV on Sunday night, a third round of voting by MPs will take place on Monday afternoon, with the result announced at 8pm by Sir Graham Brady, the chair of the 1922 Committee of backbench Tories.
Tom Tugendhat, the chair of the Commons foreign affairs committee, who has never held a ministerial post, is seen as most likely to be eliminated. He came fifth in the first and second rounds of voting, with his support dropping between the two votes.
That would leave Rishi Sunak, the former chancellor; Liz Truss, the foreign secretary; the trade minister Penny Mordaunt; and Kemi Badenoch, a former levelling up minister.
Badenoch is seen as most likely to be knocked out in the fourth round of voting on Tuesday afternoon.
Following a final TV debate that evening, a fifth round on Wednesday will whittle down the field to two, with Conservative party members then deciding which of them should be leader, and thus prime minister, in early September.
One of the dominant elements of the race so far has been offers of tax cuts often totalling tens of billions of pounds a year, with Sunak using the debate on Sunday to say this could fuel inflation.
Speaking to BBC News on Monday morning, Mark Flanagan, the UK head of the International Monetary Fund (IMF), said tax cuts financed by debt would be a mistake at the moment.
“At some point you have to decide, do we want to invest in the climate transition? Do we want to invest in digitalisation? Do we want to invest in skills for the public?” he said. “Well, if you do you need the resources to do it. And the way to realise those resources is to lift the tax ratio a little bit.”
There were clashes between Sunak and Truss in particular during Sunday’s often fractious debate, with the former chancellor saying his colleague was in effect advocating socialism by promising tax cuts worth as much as £30bn annually, suggesting they could be paid for through additional borrowing and faster growth.
Truss told Sunak he had raised taxes to the highest level in 70 years, saying that “will choke off economic growth”.
Sunak responded by warning about the inflationary effect of tax cuts, adding: “And you know what, this something-for-nothing economics is not conservative, it’s socialism. If we’re not for sound money, what is the point of the Conservative party?”
Kit Malthouse, the government minister sent out on Monday’s broadcast round, primarily to talk about an unprecedented red warning in place over the UK heatwave, predicted his colleagues would come back together in a “spirit of harmony and love” after the leadership campaign.
Malthouse, who holds the cabinet role of chancellor of the duchy of Lancaster, said: “I think it’s good to have a vigorous debate within any kind of political organisation. All political parties are standing coalitions and the Conservative party is the same. A vigorous exchange of ideas, in what is a challenging time for the country, should be expected when you are talking about such important issues and the leadership of a G7 nation.
“If it was just a polite agreement and consensus across the board, there wouldn’t be much point in having a competition at all.”
