The dire economic warnings from the Bank of England of a 15-month recession with inflation hitting more than 13 per cent look set to dominate the Tory leadership contest. With four weeks left of the campaign (but with ballots already out), the focus has returned to the differences between Rishi Sunak and Liz Truss’s approaches to the economy. It’s the territory that Sunak feels the most confident on and where his campaign hope to make up lost ground.
The Sunak camp have been quick to go on the attack over an interview the Foreign Secretary, who is the frontrunner in the race, gave to the Financial Times over the weekend in which she would tackle cost of living in a conservative way of tax cuts over ‘handouts’. Supporters of Sunak read this as Truss ruling out emergency relief packages in the autumn (something Sunak has said he will do) just as the energy price cap rises further. His supporters, such as Mark Harper, were quick to suggest this was the wrong approach while the campaign has also put out stats to make the point that reversing the national insurance hike will only offer limited relief to low earners given the economic squeeze they face.
However, Team Truss insist that this is a manufactured row: she hasn’t actually ruled out extra help. She also said in the interview: ‘Of course I will look at what more can be done.’ What the exchange does point to, however, is how Truss would likely tread a rather different path to Johnson’s government on the economy. As chancellor, Sunak was willing to adopt plenty of ‘unconservative’ measures that upset MPs on the right of the party including the recent windfall tax, which he brought in after Labour suggested it.