Truss has steadfastly refused to spell out what she would do to combat rising energy costs if she becomes prime minister, which she will officially do on Tuesday if, as expected, she defeats Rishi Sunak for the party leadership. Speaking on Sunday, Truss promised an announcement on how she would help people with bills within the first week in No 10 if elected, but declined to elaborate again. However, he failed to rule out a government-imposed account freeze, as suggested by Labor. Overnight, The Times and Daily Telegraph reported that her group was discussing possibly doing so, although such help could be more targeted than Labour’s blanket proposal. Writing in Monday’s Financial Times, Kwasi Kwarteng, the business secretary who is seen as Truss’ choice for chancellor if he wins, said a new government would have to take “decisive action” on the economy and accounts . Kwarteng, who closely shares Truss’s beliefs about the need for a lower-tax, low-regulation economy, admitted in the article that helping people as well as her promises of immediate tax cuts would lead to increased government borrowing for some time, but promised a “fiscally responsible” approach. Some observers, including senior Tory MPs, have warned that Truss’ economic plan risks fueling inflation and could push up interest rates. Former minister David Davis, who comes from the same low-tax wing of the Conservative party, said on Sunday that the Truss would have to “think very hard” about its plans. “The worst outcome is, so to speak, giving low taxes a bad name,” Davis said. Paul Johnson, head of the Institute for Fiscal Studies thinktank, said Truss’ plans could bring “not only extremely high borrowing in the short term, but also additional inflationary pressure”. “He is clearly absolutely right that we have had tremendous growth over the last 15 years,” he told BBC Radio 4’s Today programme. “The ‘but’ is that simply cutting taxes, cutting national insurance contributions, for example, is not a strategy for the development”. Writing in the FT, Kwarteng said the UK economy was suffering from the impact of the invasion of Ukraine and Covid. He said: “Families and businesses are feeling the impact across the UK and the world. In response, we must be bold. This will be Liz Truss if she is elected leader of the Conservative Party and Prime Minister of the United Kingdom.” Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. He added: “We know households are worried and decisive action is needed to get families and businesses through this winter and next. They need certainty.” Promising policies to boost growth, Kwarteng said the scale of the crisis meant “there will need to be some fiscal easing to help people through the winter”. He added: “This is absolutely the right thing to do in these extremely difficult times. The UK’s debt to gross domestic product ratio is lower than any other G7 country apart from Germany, so we don’t need too much fiscal tightening. “But I want to assure that this will be done in a fiscally responsible manner. Liz is committed to austerity and, as the immediate shock subsides, we will work to reduce the debt-to-GDP ratio over time.” In an interview with the BBC on Sunday, Truss marked a marked economic break with her immediate predecessors as Tory leader, saying she was not focused on policies to help reduce income inequality, preferring instead to try to grow the economy as a whole . Asked about her plan to cut National Insurance, Truss said it was only fair that it would benefit the highest earners 250 times more than the poorest, arguing that it was wrong to see all economic policy through the “lens of redistribution”.
