Rishi Sunak has accused rival Conservative leadership candidates of promoting “socialism” by promising unfunded tax cuts, as deep divisions in the party over economic policy were exposed in a heated televised debate.
As the challengers repeatedly clashed over tax and spending in the ITV debate, Liz Truss hit out at her former cabinet colleague, saying: “Rishi, you’ve raised taxes to the highest level in 70 years. This will not stimulate economic growth.
“The fact is that raising taxes at this point will stifle economic growth,” she added.
Truss has promised up to £30bn worth of tax cuts, suggesting they could be paid for by extra borrowing and faster growth.
Sunak, however, insisted that immediate tax cuts would have costs in “higher inflation, higher mortgage rates, eroded savings.”
“And you know what, this something-for-nothing economy isn’t conservative, it’s socialism,” he said. “If we’re not about serious money, what’s the point of the Conservative Party?”
The bitter leadership battle sparked by Boris Johnson’s reluctant resignation as Tory leader 10 days ago has pitted current and former cabinet colleagues against each other.
Truss, who has the support of Johnson loyalists including Jacob Rees-Mogg and Nadine Dorries, has singled out against Sunak, who also led in the first two rounds of voting among MPs.
However, he has staunchly defended his record as chancellor – including the decision to raise national insurance contributions.
As well as questioning his colleagues’ plans to cut taxes, Sunak also accepted Penny Mordaunt’s suggestion earlier on Sunday that he could ditch one of his fiscal rules – a pledge to borrow only for investment, not everyday expenses – to allow the Treasury to spend more to meet living expenses.
Challenged by this, Mordaunt said: “Too many chancellors have had too many fiscal rules which they then had to abandon because they failed to deliver,” prompting Sunak to fire back: “Literally, Jeremy Corbyn didn’t think he was the right approach.”
Taxes and the economy are at the heart of the race, with Sunak the only candidate not promising immediate tax cuts, promising instead not to tell “tales” about what’s available.
After each candidate got a chance to question one of his colleagues, three of Sunak’s four challengers turned on him.
Kemi Badenoch asked him why he had not taken more action against Covid loan fraud, despite the fact that she and other ministers had raised the issue with him during the pandemic.
He said: “This is absolutely not right,” highlighting the speed with which the scheme had to be introduced. Truss asked Sunak if he still favored investment in China, and Mordaunt asked if he had done enough as chancellor to fund defense spending.
Sunak turned to Truss, asking her: “You’ve been both a Liberal Democrat and a Remainer: I’m just wondering which one you regret the most?” The foreign secretary said she was not born into a Conservative home and had a political “journey”.
She also returned to a familiar theme from her comprehensive school in Leeds, where she claimed her classmates were let down by low expectations, which contributed to her drifting to the right.
Shortly before the debate, Sunak’s team had released a strange black-and-white Pathé News-style video, drawing attention to the fact that he supported Brexit in 2016, unlike Truss.
Conor McGinn, Labour’s deputy national campaign co-ordinator, said the style of it “feels right for the man who, as chancellor, brought us the highest taxes and the biggest drop in living standards for 70 years … Rishi Sunak has brought us back in the 1950s’.
One of the few notable moments of consensus in the debate, which saw the candidates repeatedly pitted against each other, was when host Julie Etchingham asked them to raise their hands if they accepted Boris Johnson into their cabinet.
None of them did – although Mordaunt said “he made Brexit”. All five also said they would not call a general election to be given a mandate if they win the leadership race this fall.
Tom Tugendhat attacked his rivals for staying in government supporting Johnson, saying: “Even really good people have given credence to the chaos.”
Dominic Raab, the deputy prime minister who supports Sunak, previously suggested that Truss’ record in government belied her claim to be a tax cut. “Liz can be responsible for her policy and her record; she was the Principal Secretary of the Ministry of Finance. People can see whether spending and civil service numbers have gone up or down,” he told Sky News’ Sophie Ridge. “Did she cut taxes at that time?”
The debate was the second of three televised showdowns between the candidates. Half of the original field of 10 contenders, including Sajid Javid and Jeremy Hunt, have already been knocked out after two rounds of voting.
Further votes among MPs will be held on Monday, Tuesday and, if necessary, Wednesday, with the final two candidates put forward to Conservative members, who will make a final decision by September 5.
A new online survey of party members published on Sunday by the website Conservative Home suggests Mordaunt’s popularity may have peaked. It showed Truss beating Sunak 49% to 42% and Mordaunt 48% to 41% in head-to-head comparisons.
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Mordaunt has previously criticized what she called the race’s “toxic politics” and “slander” against her.
Documents leaked to the Sunday Times suggest that Mordaunt is prepared to remove some, though not all, of the medical requirements for people who decide to change their gender.
Badenoch, her successor as equalities minister who is also running for the leadership, said Mordaunt’s position in the past had been to push for self-identification. This contradicts Mordaunt’s insistence in Friday’s Channel 4 debate that she has “never supported self-identification”.
Badenoch told the Sunday Times: “I’m not going to call her a liar, I think it’s very possible that she really didn’t understand what she was signing. This is a very complex area.
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