Conservative leader frontrunner Liz Truss faced renewed pressure on Sunday to outline her plans to tackle the cost of living crisis. Lawmakers called for greater support for households and small businesses to grapple with rising utility costs.
The Foreign Secretary, who has advocated a £30bn tax cut, is considering lowering the VAT by up to 5% and raising individual allowances to start paying income tax on income.
Truss has so far denied giving “subsidies” to relieve pressure on income, explaining that it “takes money from people in taxes and gives it back to them as benefits.” Her allies on Sunday indicated that the support package was unlikely to include an additional one-time payment.
However, an official close to the foreign secretary emphasized that all options will be considered and a final decision on financial support will be made after the new party leader is announced on September 5.
Allies of Rishi Sunak called the latest VAT cut proposals, first reported by The Sunday Telegraph and The Sunday Times, “flawed” and “regressive”. One official on the former prime minister’s team said:
“Value-added tax cuts will benefit high-income households more, and low-income households who need the most help this winter will benefit little or nothing,” they added.
Conservative MPs, meanwhile, have expressed concern about the impact of rising energy prices on homes and businesses, with regulator Ofgem on Friday saying the energy price cap will be raised by 80% in October, reducing claims announced that it would average up to £3,549. user.
“We are hearing from voters who are reaching out for the first time that they are worried about how they will get through this winter,” one senior Tory MP told the Financial Times. “Existing Help Some of his packages haven’t been touched end-to-end.”
Another Conservative MP said he thought Mr Truss was right not to disclose details of the plan until he was elected, but said he was concerned about households’ ability to control energy prices over the winter. “The worry is, ‘How long is this going to last?'” they said.
Other Tory lawmakers warned about the future of small businesses. “I hear corporate billings are up 300% for him. Some of these numbers aren’t viable, so companies will be shut down,” a senior Tory back venture argued. .
“We need to provide more financial support for energy bills to small businesses,” added another. “If they have to pass the cost on to their customers, it will only fuel further inflation.”
Over the weekend, outgoing Prime Minister Boris Johnson blamed Moscow for a cost-of-living crisis, while Russian President Vladimir Putin said it was triggered by a gas crisis, facing a “spectacular” rise in energy prices. He said he hoped the UK would “buckle”. By the war in Ukraine.
Johnson added the country was “resilient enough” to weather the coming months, adding that his successor would bring in a “huge package” of financial support.
The cost of living crisis is just one of several pressing issues facing the next Prime Minister, with concerns over backlogs on the NHS waiting list and continued ambulance delays.
Matthew Taylor, chief executive of the NHS Confederation, argued on Sunday that there needs to be an “honest conversation” about the capacity of health services heading into winter.