U.K.’s Sunak Tells Truss to Choose Tax Cuts or Energy Support

Rishi Sunak has told Liz Truss, his rival and the front-runner in the race to be the next UK prime minister, she can’t deliver both support for struggling British households this winter and stick to her flagship policy of tax cuts.

Article content

(Bloomberg) — Rishi Sunak has told Liz Truss, his rival and the front-runner in the race to be the next UK prime minister, she can’t deliver both support for struggling British households this winter and stick to her flagship policy of tax cuts.

Article content

The way to tackle the cost of living crisis, caused by soaring energy and food bills, has become a key point of difference in the two candidates’ campaigns to replace Boris Johnson. Sunak, the former Chancellor of the Exchequer, is pledging more direct aid and Truss stressing the importance of allowing people to keep more of their money.

The stakes in the debate will be raised further this week when the energy regulator Ofgem announces what the new price cap will be for the three-month period beginning in October. Consultancy Auxilione estimates that will leave the average bills near £3,600 ($4,292), up from £1,971 currently.

Kwasi Kwarteng, a Truss ally and a contender for chancellor in her administration, wrote in the Mail on Sunday that “help is coming” for households, but declined to give specific policies. In an interview in the Sun on Sunday, Truss said she was planning to rethink taxes paid by self-employed workers and try to limit disruptive strikes.

Article content

“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,” a spokesperson for the Sunak campaign said. “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.”

Another policy mooted on the weekend, although not directly linked to any one campaign, was a Treasury plan to ask British doctors to to prescribe heating bill discounts to vulnerable patients. That idea was quickly criticized by analysts and unions, with the British Medical Association saying it “beggars belief.”