Sunak steps up attacks on Truss policies amid growing inflation fears

The cost-of-living crisis appears set to dominate the latest hustings clash between Liz Truss and Rishi Sunak.

Rishi Sunak addressed the Conservative Friends of India at Dhamecha Lohana Centre in South Harrow, London on Monday night. He has stepped up his attacks on Truss over her plans for the economy (Leon Neal/PA) (PA Wire)

Rishi Sunak hit out at Liz Truss on Tuesday as he warned his rival’s plans could pour “fuel on the fire” and worsen inflation.

It comes as the cost-of-living crisis appears set to dominate the latest hustings clash between Ms Truss and Mr Sunak as the Tory leadership rivals prepare to go head to head in Birmingham.

Mr Sunak was on the campaign trail ahead of the debate, where he was once again forced to fend off the suggestion that he should quit the contest to allow the next prime minister to take charge of the worsening economic situation as soon as possible.

The former chancellor will again have the chance to make his case to Tory members at a two-hour event in the UK’s second-largest city on Tuesday evening, as the Foreign Secretary continued to face questions over reports that she would not ask the independent Office for Budget Responsibility (OBR) for a forecast ahead of the measures she is planning for next month, if she becomes prime minister.

(PA Graphics) (PA Graphics)

The Government, alongside the two leadership contenders, continues to face calls to tackle the cost-of-living crisis, even as it was announced that around six million disabled people will receive a £150 cost-of-living payment from the end of September.

Mr Sunak, speaking to broadcasters ahead of the hustings, said he understood tax cuts “may sound attractive at first, but if they risk stoking inflation and actually do nothing to help poorer people and pensioners, then they actually are going to be bad for everyone”.

“I think people know if something sounds too good to be true, it probably is,” he said.

Setting out his own plans, he said: “I’d cut VAT on energy bills to provide some support to everyone, but I want to provide direct financial assistance to two other groups of people – those on the lowest incomes and pensioners, because those people will need extra help this autumn and winter and I know things are difficult and I want them to be reassured that with me as prime minister, they will get the help that they need.”

Mr Sunak, who also criticised any plans to review or look at the Bank of England’s mandate on inflation, said that borrowing money at the moment to fund tax cuts would be a “big gamble”.

“I don’t want to put fuel on the fire, I don’t think that is the right approach.”

Sunak supporter Robert Halfon, appearing on Sky News, had earlier insisted the former chancellor would not quit the contest.

The senior Tory MP said: “The contest will be over very shortly. I think it’s right that members have a choice. It’s still all to play for.”

Earlier, Truss supporter and minister for disabled people Chloe Smith played down the criticism of Truss over the OBR and insisted the frontrunner “would want to be able to use all the data that is available” if she became prime minister”.

She also said that rather than focus on freezes to the energy price cap, as Labour has demanded, a Truss administration would “look at the longer-term solutions about how to bring energy prices down”.

It came as the chairman of the Treasury Select Committee said he had written to Chancellor Nadhim Zahawi, as well as the OBR, to ask whether work is being carried out to prepare for a potential emergency budget.

Mel Stride, who backed Mr Sunak in the contest, has asked for a response by the end of the week.

He said: “Whether such an event is actually called a budget or not is immaterial. The reassurance of independent forecasting is vital in these economically turbulent times.

“To bring in significant tax cuts without a forecast would be ill-advised. It is effectively ‘flying blind’.”

Ahead of the debate, Ms Truss set out her plan to boost growth and drive opportunity across the West Midlands.

She said lower taxes, better regulation and supply-side reform will create a favourable environment for the private sector in the region.

Mr Sunak, who called the West Midlands the “birthplace of the first Industrial Revolution”, said he would deliver a “better UK alternative” to the EU’s Horizon funding programme amid a row with the bloc over British participation in the flagship science scheme.

The Sunak campaign accused the EU of dithering and “playing politics” on Horizon, with the funding the UK would normally send to the EU for participation in the programme being used for the rival scheme.

Labour continued to hit out at the two candidates and the “zombie” Downing Street administration.

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John Healey, shadow defence secretary and MP for Wentworth and Dearne, told LBC: “What’s needed now is immediate, urgent action to help people deal with the emergency that they face over energy costs and that’s what we want to see – and we’ve seen no sign that either Rishi Sunak or Liz Truss is willing to consider this.”

Times Radio’s John Pienaar will present the hustings on Tuesday evening, interviewing each candidate and moderating questions from the audience.

It will be broadcast live on Times Radio from 7pm to 9pm and streamed in vision on the Times Radio YouTube channel.