The final five candidates in the Conservative leadership race have clashed over their tax plans in a heated first televised debate.
As former Chancellor Rishi Sunak dismissed promises of tax cuts from his rivals as ‘a frenzy of unfunded borrowing and more debt’, Foreign Secretary Liz Truss hit back saying: ‘You don’t can’t tax your way to growth”.
Penny Mordaunt said ‘people need help now’ and that without a change in the tax burden the UK will become ‘one of the least competitive nations’ by next April.
But Mr Sunak insisted he was right to make the ‘tough decisions’ at the Treasury, such as increase in national insurance to pay for health and social careand the promising reductions were now a “fairy tale”.
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During the 90 minute debate on Channel 4, the runners were also asked the question whether or not Boris Johnson was an honest man.
While most gave longer answers than requested, Kemi Badenoch said “sometimes”, while Tom Tugendhat emphatically said “no”.
It was the first of three televised debates the contestants will face in the race to become the next Conservative leader and the next Prime Minister of the UK.
An Opinium snap poll on the top results placed Mr Tugendhat as the winner with 36% of the vote, followed by Mr Sunak with 24%.
Ms Mordaunt and Ms Badenoch both got 12% of the vote, but Ms Truss trailed with 7%.
But Mr Sunak has so far led every ballot among Tory MPs, and Mr Tugendhat has been bottom.
The next debate will fall on Sunday evening on ITV, while Sky News will host its own at 8pm on Tuesday, hosted by Kay Burley.
And the candidates will be further reduced on Monday, in a third round of voting.
The final two leadership candidates will emerge by the end of next week and then face a summer of jostling – with Conservative Party members given the chance to decide who should become the next prime minister.
A winner will be announced on September 5.
Tax – to reduce or not to reduce?
The exchanges became more tense when the five Tory MPs were asked about their tax plans, which has been a common problem throughout the contest so far.
Mr Sunak – who resigned as chancellor last week – maintained his balance sheet at the Treasury, saying rather than focusing on taxation, “inflation is the enemy that makes everyone poorer”.
He added: “I don’t think the responsible thing to do right now is to go on a binge of unfunded borrowing and more debt, that will only make inflation worse, that will make the problem worse. “
But Ms Truss, who has pledged to halt planned corporate tax hikes and suspend green levies to reduce the tax burden, said she would spread COVID debt over a longer period to cover the cost and blamed the Bank of England for the current record. inflation rate.
She said: “We have to be bold, we have to do things differently, we have to cut taxes, we have to unleash growth, and we have to unlock the potential of everyone in our great country.”
Mr Sunak replied: ‘Borrowing out of inflation is not a plan, it’s a fairy tale’, adding: ‘There is no COVID debt…debt is debt.’
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Ms Mordaunt made fiscal pledges, such as cutting fuel taxes, and said the green levies “hit families and businesses [so] you have to watch”.
She was challenged by Mr Sunak on how she would pay for her projects and said the UK needs to tackle the ‘barriers to investment, the things that hold back innovation’ and that is would mean more money in the treasury coffers.
Many of the candidates who voted for the National Insurance hike, including Ms Truss, have vowed to drop it if they come to power, but Mr Sunak insisted he would stick to the measure, even if it were not a “politically practical” belief.
But Mr Tugendhat said the former chancellor only brought it in ‘because the boss wanted him to’, and he stuck to his decision as the only member of the panel to vote against it.
“I was the only one here who didn’t vote for the National Insurance increase and now it seems everyone agrees with me,” he added.
Calls for growth
On overall tax policy, he said he would like the public to “keep more” of their money, but “public services are extremely important to all of us” and they needed funding.
But Ms Badenoch, who like Ms Truss wants to suspend green levies, said ‘you don’t necessarily have to’ cut public services to fund tax cuts ‘if you have the growth’.
Speaking after the debate, Labour’s Pat McFadden said: ‘Britain doesn’t need another Prime Minister unable to be candid with the British public. But the Tory wannabes have all lined up to offer billions of pounds in unfunded tax cuts without saying whether the money would come from more loans or more public services.
“It has never been clearer that Britain needs a fresh start with Labour.”
Other issues were also raised, including tackling the cost of living crisis, creating a green economy and supporting the NHS.
Ms Mordaunt has also been pressed for her views on trans self-identification, having come under fire in recent days following accusations that she had changed her stance.
She denied ever supporting him, adding, “I’m a woman, I’m a biological woman, if I had a mastectomy I still would be. But I’m also legally a woman.”
Ms Mordaunt said some people born male are given a document that legally recognizes them as female, “but that doesn’t mean they are identical to me”.