As the candidates repeatedly clashed over tax and spending in the ITV debate, Liz Truss confronted her former Cabinet colleague, saying: “Rishi, you have raised taxes to the highest level for 70 years. This is not going to lead to economic growth. “The fact is that raising taxes right now will stifle economic growth,” he added. The Trust has promised tax cuts of up to £30bn, suggesting they can be paid for through additional borrowing and faster growth. Sunak insisted there would be a cost to the immediate tax cuts, however, “higher inflation, higher mortgage rates, eroded savings”. “And you know what, this something-for-nothing economy is not conservative, it’s socialism,” he said. “If we’re not for good money, what’s the point of the Conservative party?” The bitter leadership race, sparked by Boris Johnson’s reluctant resignation as Tory leader 10 days ago, has pitted current and former cabinet colleagues against each other. Truss, who has the support of Johnson loyalists including Jacob Rees-Mogg and Nadine Dorries, has been singled out against Ms Sunak, who led both of the first two rounds of voting among MPs. However, he strongly defended his record as chancellor – including the decision to increase national insurance contributions. As well as questioning colleagues’ tax cut plans, Sunak also accepted Penny Mordaunt’s suggestion earlier on Sunday that he could waive one of his fiscal rules – a pledge to only borrow for investment, not everyday spending – to allow the Treasury to spend more to tackle the cost of living. Challenged on this, Mordaunt said: “A lot of chancellors have had too many fiscal rules which they then had to abandon because they couldn’t stick to them,” prompting Sunak to hit back: “Literally Jeremy Corbyn didn’t believe that. it was the right approach.” Taxes and the economy are at the heart of the contest, with Sunak the only candidate not to promise direct tax cuts, instead promising not to tell “tales” about what is affordable. As each candidate was given a chance to question one of his colleagues, three of Sunak’s four opponents turned against him. Kemi Badenoch asked him why he failed to take more action on Covid loan fraud despite her and other ministers raising the issue with him during the pandemic. He said: “This is absolutely not right,” stressing the speed with which the plan had to be developed. Truss asked Sunak whether he still favors investment in China, and Mordant questioned whether he had done enough as chancellor to fund defense spending. Sunak turned to Truss, asking her: “You were both a Lib Dem and a Remainer: I’m just wondering which of them you regretted the most?” The Foreign Secretary said she was not born into a conservative home and had a political “journey”. She also returned to the familiar theme of her comprehensive school in Leeds, where she claims her classmates were let down by low expectations, contributing to her move to the right. Shortly before the debate, Sunak’s team had released a quirky black-and-white Pathé News-style video, drawing attention to the fact that he supported Brexit in 2016, unlike Truss. Conor McGinn, Labour’s deputy national campaign co-ordinator, said his style “feels right for the guy who as chancellor brought us the highest taxes and the biggest drop in living standards in 70 years… Rishi Sunak has taken us back to 1950s”. One of the few striking moments of consensus in the debate, in which the candidates repeatedly confronted each other, was when presenter Julie Etchingham asked them to raise their hands if they would welcome Boris Johnson into the Cabinet. None of them did – although Mordant said he had “completed Brexit”. All five also said they would not call a general election to give them a mandate if they won the leadership race this fall. Tom Tugendhat attacked his opponents for staying in government by supporting Johnson, saying: “Even very good people gave credibility to the mess.” Dominic Raab, the deputy prime minister, who supports Sunak, earlier suggested Truss’s record in government belied her claim to be a tax collector. “Liz can answer about her policies and her background. he was general secretary of the Ministry of Finance. People can see whether spending and headcount in the public service has gone up or down,” he told Sky News’ Sophy Ridge. “Did he cut taxes at that time?” The debate was the second of three televised clashes between the candidates. Half of the original field of 10 contenders, including Sajid Javid and Jeremy Hunt, have already been ruled out, after two rounds of voting. Further votes among MPs will be held on Monday, Tuesday and if necessary on Wednesday, with the final two candidates then presented to Conservative members, who will make a final decision by September 5. A new online survey of party members, published on Sunday by the Conservative Home website, showed that Mordaunt’s popularity may have peaked. It showed Truss beating Sunak 49% to 42% and Mordaunt 48% to 41% in head-to-head comparisons. Subscribe to First Edition, our free daily newsletter – every morning at 7am. BST Mordaunt has previously criticized what she called the tribe’s “toxic politics” and is “blowing the whistle” on it. Documents leaked to the Sunday Times suggest Mordaunt was prepared to remove some, though not all, of the medical requirements for people who choose to change sex. Badenoch, her successor as equality minister, who is also running for the leadership, has said Mordaunt’s stance in the past has been to push for self-determination. This contrasts with Mordaunt’s insistence on Friday’s Channel 4 debate that she was “never in favor of self-identification”. Badenoch told the Sunday Times: “I’m not going to call her a liar, I think it’s quite possible she didn’t really understand what she was signing. It’s a very complicated area.”
