Liz Truss’s tax cuts ‘will do nothing to help pensioners’

·4 min read
Liz Truss plays pool - Dylan Martinez/Pool/Getty Image
Liz Truss plays pool - Dylan Martinez/Pool/Getty Image

A leading supporter of Rishi Sunak has claimed that Liz Truss’s plan for a tax-cutting emergency Budget would do “nothing at all” to help pensioners through the worsening cost of living crisis.

Mark Harper, a former Tory chief whip, said the Foreign Secretary’s focus on immediately cutting taxes would help high earners while doing little to improve the situation for retired people or those on low wages.

The two Tory leadership candidates have faced calls to sit down with Boris Johnson to agree a plan to deal with rising prices and spiking energy bills before Sep 5,when the winner of the Tory contest will be announced and take office.

But both Ms Truss and Rishi Sunak have ruled out doing so, and Mr Harper said the candidates could not work together on a plan because they have a “big difference of opinion” on how to approach the situation.

The comments came after Mr Sunak announced that he would be prepared to take action and roll out extra help for families this autumn if he becomes prime minister.

The former chancellor said he would act “as soon as we know how much bills will go up by”. Forecasts have suggested that average household energy bills could reach almost £4,000 when the price cap is reviewed in October.

Ms Truss’s campaign has been forced onto the defensive in recent days after the Foreign Secretary suggested there would be no “handouts” if she won the leadership contest and that her priority was reducing the tax burden.

Her allies have insisted she is committed to helping families struggling with soaring bills and further direct support has not been ruled out.

Ms Truss last weekend promised to use an emergency Budget to “hit the ground running” and “pave the way to economic growth” by delivering immediate tax cuts if elected.

The differing plans put forward by the two campaigns have further fuelled “blue on blue” attacks, as supporters of Mr Sunak and Ms Truss continue to engage in bitter clashes.

Dominic Raab, the Deputy Prime Minister and a supporter of Mr Sunak, said overnight that Ms Truss’s plan for an emergency tax-butting Budget risked becoming an “electoral suicide note” for the Conservative Party if it failed to adequately address the cos of living crisis.

Mr Raab told The Times that Ms Truss’s plan to scrap the National Insurance rise would “do little” to help the most vulnerable, labelling it as “bad politics”.

Mr Harper piled in on Tuesday as he said Mr Sunak intended to help people with further “rebates on bills and direct support” for the most vulnerable, something he argued would be a more effective intervention than tax cuts.

“By contrast, Liz Truss has said that she is not going to deliver what she calls ‘handouts’ and she is only going to cut tax and the problem with that is, it gives a big tax cut to the prime minister, £1,810 a year, but only £59 to somebody working full time on the national living wage and nothing at all to pensioners,” he said.

“So I think what Rishi is setting out is the right plan, which I hope will provide a lot of reassurance and comfort to those who are worrying this winter about how they are going to pay their energy bills.”

Asked why Mr Sunak and Ms Truss would not sit down with Mr Johnson now to come up with a cost of living plan amid fears of a month of drift, Mr Harper told Sky News: “Very clearly, there is a fundamental difference of opinion between the two leadership candidates.”

Paul Scully, the minister for London and a supporter of Ms Truss, said he believed the ongoing “blue-on-blue” attacks would leave voters “tearing their hair out”.

He told Times Radio: “People looking from the outside must be tearing their hair out because all we want to do is do the best for the country, for people.”

He insisted that Ms Truss’s tax-cutting plan is the “right thing to do” because “the first Conservative thing to do is don’t take the money from people in the first place, rather than just take money to give it back to them”.

It came as Sir Ed Davey, the leader of the Liberal Democrats, called on the Government to “cancel” the October energy price cap increase. He said the Government should absorb the cost of the expected rise, shielding families from more financial pain.

The Lib Dems said the move would cost an estimated £36 billion and argued it could be paid for by expanding the windfall tax on oil and gas company profits.

Sir Ed said the Tory leadership contest “might as well be happening in a parallel universe” as he claimed “neither candidate has any idea how to help families and pensioners through what could be the toughest winter in decades”.