The rift within the Tory Party over how to deal with the cost of living crisis deepened today amid warnings the country faces a “poverty time bomb”.
Liz Truss has come under fire after she said there would be no “handouts” if she wins the race for No.10 and that her priority was reducing the tax burden.
Her leadership rival Rishi Sunak, described Truss’s plan to cut taxes in an emergency budget as a “big bung” for large businesses that would do little to help those most in need over the winter.
MPs supporting Truss have since sought to play down suggestions there would be no handouts for millions of struggling families.
Former Northern Ireland secretary Brandon Lewis - who is backing the foreign secretary - said they would look to do “whatever we can” to help people under pressure from rising inflation.
Meanwhile, another backer Penny Mordaunt suggested Truss had been misinterpreted.
“It’s not that she’s ruling out all future help,” the trade minister told Sky News. “What she is looking at, though, is enabling people to keep more of the money that they earn.”
But Sunak said her plans to scrap the national insurance hike, which he brought in as chancellor to fund the NHS and social care, would leave someone on the national living wage less than £60 a year better off while pensioners would not get a penny.
Writing in The Sun, he said that her proposed cut in corporation tax would do nothing to help small businesses and would put money back in the coffers of the biggest companies with the largest profits.
“These tax cuts simply won’t touch the sides. We need clear-eyed realism, not starry-eyed boosterism.
“That means bolder action to protect people from the worst of the winter,” Sunak said.
With the Bank of England forecasting inflation is set to hit 13 per cent - and average household energy bills predicted to reached almost £4,000 - Gordon Brown also issued a stark warning on Monday.
The former Labour prime minister joined forces with The Big Issue to call on the government to take urgent action to prevent a “poverty time-bomb” going off in October.
It comes amid another warning to Truss, via a YouGov poll for The Times that indicated that 64 per cent of voters thought the next prime minister should concentrate on inflation, with 17 per cent favouring tax cuts.
Former Conservative party co-chairman Oliver Dowden, who is backing Sunak, said that while Truss was emphasising tax cuts, the former chancellor accepted the need for “bold, big interventions”.
“We need to be realistic and honest with people about the scale of the challenge that we’re facing,” he told Sky News.
“Both with the scale of inflation that’s coming down the line, something we haven’t seen for almost 40 years and with the fact that energy bills are going to go up, possibly towards £4,000.
“There is no doubt that we do need an intervention of a considerable scale to deal with this.”
Lewis defended Truss’s approach, insisting she wants to put more money in people’s pockets.
“We will look to do whatever we can to help people - that’s what an emergency budget is about,” he told the BBC Radio 4 Today programme.
“She’s willing to do more to help people but her focus is around doing it in a way that puts more money in people’s pockets, creating a high-growth economy with higher wages, more people in work.
“So rather than having handouts, what we do is have a low-tax economy that’s driving growth and therefore with people having more money in their pockets, they’re better placed to deal with some of the challenges that we see.”
Lewis said it was still possible deliver tax cuts while dealing with inflation.
“We want to do both, want to make sure we’re getting on top of inflation and you can – to get on top of inflation whilst still putting more money in people’s pockets,” he told Times Radio.
“I think it’s a false premise to argue that you can’t deal with inflation whilst making sure that people are better off at the same time.”