It is understood Ms Truss will launch a spending review if she wins office, reopening a three-year deal Mr Sunak signed as chancellor last year. He also wants to push through the Budget, which is currently booked for November, according to an ally, with plans to cut taxes to be pursued once he is in Number 10. Scrapping the rise in corporation tax from 19 per cent to 25 per cent due in April and reversing the 1.25 per cent rise in National Insurance, which started in the spring, will cost the Treasury tens of billions of pounds. Ms Truss said she would fund the move by reducing public debt over a longer period than Mr Sunak, who wants it to fall by 2024. The tax position is in direct contrast to Mr. Sunak’s position. He has argued that now is not the time for big tax cuts, given the need to reduce inflation, which is forecast to reach 11% this year. The UK is experiencing stagflation – both soaring prices and stuttering growth. The consensus among economists is that tax cuts are fueling inflation, but they could also boost growth. The battle over the economic approach and timing looks set to be the central battle as candidates vie to become the next prime minister.
