Truss insists her plan to cut taxes to boost growth is not a gamble

Foreign Secretary Liz Truss said she would have liked Boris Johnson to continue in office but promised a clean break from his economic policies.

Conservative Party leadership contender Liz Truss (PA) (PA Wire)

Tory leadership hopeful Liz Truss said she would have liked Boris Johnson to continue as Prime Minister despite promising to tear up the economic plans he presided over.

The Foreign Secretary insisted her plan for an emergency budget to reverse the national insurance rise, scrap the planned corporation tax increase and suspend the green levies on energy bills was “not a gamble” and would not drive up inflation further.

She said she would take on the economic “consensus” of the past two decades and allow government borrowing to increase to fund her tax-cutting plan.

Ms Truss served alongside leadership rival Rishi Sunak in Mr Johnson’s Cabinet but said the plans the former chancellor put in place had been a “mistake”, claiming she argued against the national insurance increase within government.

On her tax plans, she said: “It’s not a gamble, it’s an economic reality that the higher taxes you have the more growth is choked off.”

She insisted increasing borrowing and cutting taxes would not increase inflation, insisting the “orthodoxy” of the Treasury and the opinions of many leading economists had failed to deliver growth.

“What is the gamble is what we’re doing at the moment because, currently, the United Kingdom is projected to head for a recession,” she said.

“So we need to do something different in order to get growth going, in order to put money in people’s pockets.”

In her first broadcast interview of the leadership campaign, she said Mr Johnson’s record as Prime Minister was “extremely positive”.

“I wanted Boris to carry on as Prime Minister. I think he did a fantastic job with the 2019 election, winning us a massive majority. He delivered Brexit, he delivered the vaccines,” she said.

“Regrettably, we got to a position where he didn’t command the support of our parliamentary party.”

He had made “several mistakes over the course of the last year” but “the positive side of the balance sheet was extremely positive”, she said.

Ms Truss said she was “wrong” in the 2016 Brexit referendum, when she backed Remain.

And she denied modelling herself on Margaret Thatcher, insisting “I am my own person”.

But Mr Sunak insisted he was a “Thatcherite” as he sought to address the concerns of Tory members that he backed a high-tax, large state approach.

The former chancellor has insisted the tax burden – the highest for 70 years – is the result of the pandemic and the unprecedented levels of government intervention required to steer the country through a public health emergency.

Mr Sunak was the parliamentary party’s favourite, winning 137 votes to Ms Truss’s 113 among Tory MPs.

But bookmakers placed the Foreign Secretary as the frontrunner, with early indications suggesting she is more popular with Tory members ahead of a summer of campaigning.

Writing in the Daily Telegraph, Mr Sunak said: “My values are Thatcherite. I believe in hard work, family and integrity.

“I am a Thatcherite, I am running as a Thatcherite and I will govern as a Thatcherite.”

He said “low inflation and sound public finances” were needed as the foundation for the economy.

But “the best way to achieve economic growth is cutting taxes and bureaucracy, and boosting private sector investment and innovation”.

Mr Sunak has vowed to bring down taxes, but only once inflation is under control.

The pair will try to win over the support of local politicians on Thursday when they take part in a private hustings for the Conservative Councillors’ Association.

They will then tour the UK to take part in 12 hustings for the Tory members who will vote for their next leader, with the result being announced on September 5.

Mr Sunak argued that his rival would not be able to beat Labour leader Sir Keir Starmer at a general election.

But following a bitter parliamentary battle – and with concerns in the party about the damage a summer of infighting could do – he said Ms Truss is someone “I like and respect”.