UK Conservative leadership candidates Rishi Sunak, the former Chancellor of the Exchequer, and Liz Truss, the current foreign secretary, continued their bitter disagreements over taxes Monday night in a debate broadcast live on the BBC.
Sunak claimed Truss’ idea of borrowing to fund tax cuts was un-Conservative and would lead to 7% interest rates according to one of her economist backers.
Truss claimed Sunak’s tax rises were pushing the country into a recession.
Sunak said: “You’ve promised over £40 billion of unfunded tax cuts – £40 billion more borrowing. That is the country’s credit card and it’s our children and grandchildren, everyone here’s kids will pick up the tab for that. There’s nothing Conservative about it.”
Truss said later: “No other country is putting up taxes at this moment, the OECD has described Rishi’s policies as contractionary. What does contractionary mean? It means it will lead to a recession.”
On inflation, which recently hit 9.4%, Sunak told Truss: “We need to get a grip on inflation. If we don’t do that now, it’s going to cost all of you and everybody watching at home far more in the long run.
“Liz, your plans, your own economic adviser has said that will lead to mortgage interest rates going up to 7%. Can you imagine what that’s going to do for everyone here and everyone watching? That’s thousands of pounds on their mortgage bill.
“It’s going to tip millions of people into misery and it’s going to mean we (Conservatives) have absolutely no chance of winning the next election either.”
She said later: “This Chancellor has raised taxes to the highest rate in 70 years, and we’re now predicted a recession. The truth is in the figures.”
Truss was a prominent Remainer in the 2016 Brexit referendum but has refashioned herself as a hardline Brexiteer.
She said Sunak’s warnings of her tax plan were “project fear” – the same line Brexiteers used against Remainers in the 2016 referendum.
Sunak, who voted Leave in 2016, said: “I remember the referendum campaign. There was only one person on the side of Remain, ‘project fear,’ and it was you.”
The new leader of the Conservative Party, and in turn prime minister, will be announced on Sept. 5.