Jenny Frost
Former Chancellor of the Exchequer Rishi Sunak has promised billions of pounds in financial support to help families and businesses during the cost of living crisis. Which is set only to worsen into a recession during the winter and well into 2023.
Policy regarding tax cuts has been one of Sunak and his leadership rival Liz Truss’s most notable points of contention. According to The i, Sunak believes that this is the issue which will determine who becomes the frontrunner in the leadership contest. While Truss has pledged to cut taxes, addressing the cost of living crisis by allowing families to keep more of their wages, Sunak would wait until the following year to reduce national insurance to allow public services to survive the coming recession.
Sunak has promised a new plan of direct support, not dissimilar to the furlough scheme used during the Coronavirus pandemic. This support could include wide-reaching measures such as increased benefit payments and council tax rebates, as well as potential discounts on energy bills.
“[Truss] has said she will not provide direct support payments to those who are feeling the pinch most.”
Sunak has criticised his leadership rival, Liz Truss, saying that her economic plan of significant tax cuts will not “touch the sides”, and is determined that his plan to raise taxes while providing financial support will not only support families, but work towards tackling the recession. Writing in The Sun, Sunak affirms, “[Truss] has said she will not provide direct support payments to those who are feeling the pinch most.” He goes on to say that her plan to cut national insurance immediately will serve the richest, but will leave the poorest members of society in financial difficulty as energy prices rise. The energy price cap looks set to hit £3,615 during the winter period, nearly three times the rate of a normal year.
Over the weekend, Truss ruled out the possibility of using “handouts” to support families over the coming winter. Instead, she plans to use tax cuts to help people mitigate the rising cost of living. If elected leader of the Conservative Party, she pledges to lower national insurance immediately.
Leader of the Liberal Democrats Ed Davey has attacked the proposals of both candidates, saying that neither seemed to have understood the magnitude of the cost of living crisis. He called for an “energy furlough scheme”, for which the government would absorb £36bn of the cost, in order to mitigate rising fuel costs. This comes after former Prime Minister Gordon Brown issued similar criticism over the weekend. Writing in The Observer, he describes the cost of living crisis as a “financial timebomb“, and goes as far as to ask Sunak, Truss and Johnson to convene urgently and issue an emergency budget to address the situation.
According to POLITICO’s Poll of Polls, Sunak currently trails his rival Truss by more than 20%. Conservative Party members have received their ballot papers and are currently voting for the new party leader. Polls close on 2nd September. The winner, and new Prime Minister, will be announced on 5th September.
Featured image courtesy of Josh Appel on Unsplash. Image license found here. No changes were made to this image.
Jenny Laura Frost
Jenny is studying for her masters in Global Migration at UCL and is a Modern Languages graduate of Cambridge University. She is passionate about issues relating to migration, forced displacement, climate and language. When not writing, she can be found singing in a choir or playing her flute. Twitter: @jennylauraf