‘Simplistic’ Liz Truss warned her VAT cut will ‘crash the public finances’

Institute for Fiscal Studies attacks ‘worrying’ idea – amid fresh confusion over likely next PM’s plans for energy crisis

Liz Truss will “crash the public finances” if she pursues a huge VAT cut, a leading economist is warning, amid fresh confusion over her plans for the cost of living emergency.

The likely next prime minister has floated a plan to slash 5 per cent off the 20 per cent sales tax – but the head of the Institute for Fiscal Studies has called the idea “quite worrying”.

Ms Truss is also mulling reversing a four-year freeze on income tax thresholds and has sent out conflicting briefings on what help she will provide with soaring energy bills.