Liz Truss’ proposals to fix the UK economy will see some poorer households pushed into homelessness, a Tory MP claimed on Monday.
The current foreign secretary has promised £50 billion tax cuts in the Conservative leadership contest so far, while also indicating that she might provide businesses and households with direct support for energy bills this winter.
Kevin Hollinrake, who is backing Truss’ opponent, underdog Rishi Sunak, to be the next prime minister, told Sky News that low-income households need targeted support.
“Rishi Sunak put a package of support in place which offset the cost of energy for low-income household,” he said.
“It’s those kind of temporary, targeted, affordable measures that we need.”
Sunak unveiled substantial help to assist with the cost of living crisis in May, when he was still chancellor. This £37 billion package, funded by a temporary windfall tax on oil and gas companies, included a one-off payment of £650 to eight million households, £300 pensioner payments, £400 for universal support and £150 disability payments.
He wants to keep taxes as they are to bring inflation down, while Truss wants to immediately reverse policies like the national insurance hike.
Hollinrake claimed that Truss’ plans at the moment mean those who need the most financial support would only receive around £1 a week, while the wealthiest would receive £30 a week, adding: “It’s simply not right.”
“These people are going to be on the streets. Things are going to be that bad for some households, you’ve got to provide that targeted package of support.”
Hollinrake claimed Truss was also promising to spend too much in her “scattergun approach” through tax cuts and extra spending.
“It can’t be a case of the magic money tree again.”
Truss has made it clear she is focused on tax cuts rather than “giving handouts” throughout her campaign, before pulling back on that claim and saying she would look at assistance “across the board” to help families this winter.
Sunak’s campaign has also targeted Truss over this change in policy, saying in a statement: “Following weeks of rejecting direct support payments as ‘handouts’ supporters have slowly woken up to the reality of what winter brings.
“They now say that they will provide people with help – but what help, for who, when and how it will be paid for remains a mystery.
“The reality is that Truss cannot deliver a support package as well as come good on £50 billion worth of unfunded, permanent tax cuts in one go.
“To do so would mean increasing borrowing to historic and dangerous levels, putting the public finances in serious jeopardy and plunging the economy into an inflation spiral.”
Both candidates are under growing pressure to come up with feasible plans to fix the 10.1% inflation rate and soaring energy bills as Ofgem is expected to announce this week that the price cap will rise from £1,971 to £3,600.
Sunak’s camp also criticised Truss over reports she was not planning to ask the Office for Budget Responsibility (OBR) for a forecast ahead of her own emergency budget she wants to announce next month.
“It’s no wonder they want to avoid independent scrutiny of the OBR in their emergency budget – they know you can’t do both and it’s time they came clean about that now,” Sunak’s team claimed.
Former levelling up secretary and well-known Conservative Michael Gove also sided with Sunak last week, hitting out at Truss for being on “holiday from reality”.
Lord Griffiths, the Tory peer who was Margaret Thatcher’s head of policy, hit out at Truss too.
According to PA news agency, he said: “The Bank of England’s devastating outlook for the economy contrasts with Liz’s optimism – for her to now prevent the OBR doing proper analysis of the facts would seem to indicate complete loss of confidence in the policy she is advocating.”
Truss herself has dismissed the BoE’s forecasts, saying “there is too much talk that there’s going to be a recession”.