Conservative leadership hopeful Rishi Sunak has suggested that he would be willing to borrow “as a last resort” to fund more targeted support for households in winter, while his rival Liz Truss has criticised windfall taxes on energy companies’ profits.
The rising cost-of-living has become a key flashpoint in the debates between the two leadership candidates, with both taking diverging approaches and attacking each other’s policies.
Sunak has argued that more direct support is needed to help pensioners and poorer households over the colder months and that Truss’ idea of cutting taxes to help will not prove sufficient alone.
The former chancellor has said that he’d look to fund more targeted support through maximising government efficiencies, but would borrow if required.
It was Sunak who introduced the £15 billion package of current support measures in May during his time as chancellor, partially funded by the temporary 25 per cent windfall tax on the UK profits of oil and gas firms.
Promising further support on top of that already announced if elected to Number 10, Sunak said: “If we don't provide direct support to millions of vulnerable pensioners, it will be a moral failure of this party and the country will never ever forgive us."
He suggested that the cost of providing more support may reach the “low to middle billions” and could easily “be more” than that but emphasised that supporting the British public had to “be the first priority” and it would be worth having to “stop or pause some things in government” to intervene with rising energy bills.
“I will also be honest. If it requires some limited and temporary, one-off borrowing as a last resort to get us through this winter, I'm prepared to do that,” he said.
Meanwhile, Truss has attacked the windfall tax on energy companies as “bashing business” and a “Labour idea”, suggesting that profits were wrongly being portrayed as “dirty and evil”.
She said: “It's all about bashing business and it sends the wrong message to international investors and to the public.
"I don't think profit is a dirty word, and the fact it's become a dirty word in our society is a massive problem.
"Now, of course, the energy giants, if they're in an oligopoly, should be held to account, and I would make sure they're rigorously held to account.
"But the way we bandy the word around 'profit' as though it's something that's dirty and evil, we shouldn't be doing that as Conservatives."
The foreign secretary has said her strategy of scrapping the National Insurance rise and green energy levies will help support people in a more Conservative way and stimulate the economy, attacking Sunak’s plans for “handouts” as “socialist” policies.
Elsewhere, outgoing prime minister Boris Johnson has said that the current package of support for households is not enough and that he is expecting further measures.
Meanwhile, he added that he was striving to ensure that further resources were set aside to enable his successor to act once appointed.
Johnson said: "What we're doing...is trying to make sure that by October, by January, there is further support.
"I'm not going to pretend that things are easy for people right now, but there's more money coming anyway as a result of the decisions we've taken. I think over the medium term, the future's very bright."
Johnson said that the government had been investing in renewable energies and more nuclear power, meaning that in the longer term UK energy security would be bolstered and prices would reduce.
Incumbent chancellor, Nadhim Zahawi, had earlier said that new policies to mitigate the cost-of-living crisis would be "ready to go" by the time the next PM takes office.
Speaking in North Wales, Zahawi said: "We're looking at all the options of what additional help we need to bring in later on in the winter months."
The UK economy also seems likely to fall into recession earlier than predicted, after the Office for National Statistics recorded a 0.1 per cent contraction in Q2 of this year.
The Bank of England had previously forecast that the economy would enter recession in Q4 as energy costs rise again.
Blame factors included rising energy and food prices, the end of Covid-related measures such as Test and Trace, the additional bank holiday for the Queen's Platinum Jubilee and a drop-off in retail sales.
In the wake of the figures being published, Labour shadow chancellor, Rachel Reeves, has called on the two Tory leadership candidates to "stop playing to the gallery and start coming up with a serious plan to get Britain's economy back on track."
Photo by KWON JUNHO on Unsplash
