In the contest to become Britain's next prime minister, Liz Truss and Rishi Sunak are facing increasing calls to explain how they would help households with the UK's soaring cost of living.
Their responses to the worsening economy have emerged as the main battleground in the bid to lead the country.
Ms Truss will take her campaign to Essex on Monday while Mr Sunak plans to court communities in the north-west of England. The pair will go head-to-head at two hustings this week — in Darlington on Tuesday and in Cheltenham on Thursday.
Ms Truss came under fire from Mr Sunak’s allies for suggesting there would be no “handouts” if she led the government, but later played down the comment.
The row followed the Conservative party leadership favourite telling the Financial Times she would “look at what more can be done” after warnings from the Bank of England about the longest recession since the financial crisis and inflation rising to more than 13 per cent.
“The way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts,” Ms Truss said.
Mr Sunak quickly condemned it as “simply wrong to rule out further direct support” for struggling families this winter.
UK Conservatives on the leadership campaign trail - in pictures
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Candidates Rishi Sunak and Liz Truss at the Conservative Party leadership election hustings at Wembley Arena, London. This was the final hustings attended by Tory Party members who will vote for the new leader and next prime minister. EPA -
Liz Truss addresses Conservative Party members at Wembley Arena. AP -
Mr Sunak puts forward his case to be leader while speaking at Wembley Arena. Bloomberg -
Mr Sunak visits his family's old business, Bassett Pharmacy in Southampton, while on the campaign trail. Reuters -
Ms Truss speaks to staff at Condimentum Ltd at the Food Enterprise Park in Norwich. Getty Images -
A Rishi Sunak supporter at a hustings event in Norfolk. PA -
Mr Sunak greets people at a leadership hustings in Manchester. Bloomberg -
Ms Truss poses for a selfie with a supporter as she arrives for the event in Manchester. Getty -
Rishi Sunak looks through the sights of an anti-tank missile launcher, supplied to Ukraine, during a visit to the Thales Defence System plant in Belfast, Northern Ireland. AP -
Liz Truss at a Conservative Party leadership campaign event in Belfast. Getty -
Liz Truss meets supporters before a hustings in Perth, Scotland. Getty -
Rishi Sunak speaks during a campaign visit to Cluny Castle in Inverurie, Scotland. Getty -
Police hold back protesters outside Perth Concert Hall, Scotland, where Conservative leadership candidates Liz Truss and Rishi Sunak were speaking. PA -
A mural showing the two leadership contestants appears on a wall in Belfast, Northern Ireland. AP -
Rishi Sunak during a visit to St John's Wood Synagogue, north London. PA -
Liz Truss at the Conservative Party leadership election hustings in Cheltenham. EPA -
Rishi Sunak during a hustings event in Cheltenham. Reuters -
Liz Truss speaks to scientists during a campaign visit to a life sciences laboratory at Alderley Park in Manchester. PA -
Rishi Sunak during a campaign hustings in Darlington, England. Bloomberg -
Liz Truss meets party members before she speaks at the Darlington campaign hustings. Getty -
Rishi Sunak arrives for the Darlington hustings. Getty -
Liz Truss plays pool during a visit to the Onside Future Youth Zone in London. Reuters -
Rishi Sunak looks at a book with Teddy Openshaw, 4, as his father, Henry, looks on after a Conservative leadership campaign event in Ribble Valley, Lancashire, England. Getty -
Liz Truss plays table tennis with former Conservative party leader Iain Duncan Smith during a visit to the Onside Future Youth Zone in London. Reuters -
Liz Truss with supporters at a campaign event in Solihull, England. Reuters -
Rishi Sunak attends a campaign event held by his party in Bexhill, England. Reuters -
A protester is removed as Ms Truss speaks during the Conservative Party leadership hustings in Eastbourne. Bloomberg -
Mr Sunak speaks at an event in Edinburgh. PA -
Ms Truss leaves the hall in Exeter, south-west England, after her speech to a Conservative Party membership hustings. Getty -
Mr Sunak speaks at the University of Exeter in south-west England. AP -
A supporter of Ms Truss at a Conservative Party hustings in Exeter, south-west England. Getty -
Ms Truss at a hustings event at the Pavilion conference centre at Elland Road in Leeds. PA -
Mr Sunak in Salisbury watching a screening of the Uefa Women's Euro 2022 final between England and Germany at Wembley stadium. England won 2-1 in extra time. PA -
Ms Truss before the Uefa Women's Euro 2022 final at Wembley stadium in London. AFP -
Mr Sunak meets Tory members at Fontwell Park Racecourse. Reuters -
Ms Truss at an event in Dereham, Norfolk. AFP -
Mr Sunak in Ropley, near Winchester, Hampshire. PA -
Ms Truss speaks as Conservative Member of Parliament Tom Tugendhat looks on at a Conservative Party leadership campaign event at Biggin Hill Airport. Getty -
Ms Truss on the campaign trail in Woodford Green, on the outskirts of London. Reuters -
Mr Sunak at a Conservative Party hustings event in Leeds. AFP -
Ms Truss speaks at the hustings event in Leeds. AFP -
Sunak and Truss-themed souvenirs at a stand during the Leeds hustings event. Reuters -
Ms Truss, and her mother, Patricia, arrive for the hustings event. Getty -
Ms Truss poses with supporters in Morley, England. Getty -
Mr Sunak delivers a speech during a campaign event in Newmarket. AFP -
Ms Truss and Jake Berry, MP for Rossendale and Darwen, during a visit to a broadband interchange company in Leeds. PA -
Mr Sunak answers questions as he takes part in the hustings in Leeds. AFP -
Ms Truss speaks at an event at a private house with members of the Conservative Party in Woodford Green. PA -
Ms Truss and Mr Sunak pose for a picture before a BBC leadership debate at Victoria Hall in Hanley. Getty -
Ms Truss addresses Mr Sunak during the televised debate. Getty -
Mr Sunak, with daughters Krishna and Anushka, and wife Akshata Murthy, during a visit to Vaculug tyre specialists at Gonerby Hill Foot, Grantham. PA -
Ms Truss speaks to people while campaigning in Marden. Getty -
Ms Truss celebrates after being named, along with Mr Sunak, one of the final two candidates in the race to become the UK's next prime minister. PA -
Mr Sunak outside his campaign office in central London. EPA -
Ms Truss outside Downing Street in London. Reuters -
Rishi Sunak meets Conservative Party members and activists, in Teesport, Redcar. Reuters -
Conservative leadership candidates Mr Sunak, Ms Truss, Kemi Badenoch, presenter Julie Etchingham, Tom Tugendhat and Penny Mordaunt during 'Britain's Next Prime Minister: The ITV Debate' in London. EPA -
Ms Badenoch arrives at Here East studios in Stratford, east London, before a live television debate. PA -
Mr Sunak arrives at a London event to launch his campaign to be the next Conservative Party leader and UK prime minister. Reuters -
Mr Tugendhat appears on the BBC One current affairs programme, 'Sunday Morning'. PA -
Ms Badenoch, Ms Mordaunt, Mr Sunak, Ms Truss and Mr Tugendhat before the live television debate. PA -
Ms Mordaunt arrives for the launch of her Conservative leadership campaign at the Cinnamon Club in Westminster. PA -
Ms Truss speaks at the launch event for her campaign to become the next leader of the Tory Party and Britain's prime minister, in London. EPA -
Chancellor of the Exchequer Nadhim Zahawi, one of the candidates who has been knocked out of the race, giving a speech at the Churchill War Rooms. PA -
Former leadership candidate Jeremy Hunt appearing on the BBC One current affairs programme, 'Sunday Morning'. PA -
Sajid Javid attending the launch of his campaign to be Conservative Party leader and prime minister, at the Cinnamon Club in London. He has since been knocked out of the contest. PA -
Rehman Chishti is interviewed after announcing his bid to become the next prime minister. Mr Chishti is no longer in the race. Getty -
Mr Tugendhat speaking at the launch of his campaign. PA -
Culture Secretary Nadine Dorries and Conservative MP Iain Duncan Smith arrive for the Truss campaign launch event. Getty -
Former leadership candidate Attorney General Suella Braverman at the Churchill War Rooms in central London. PA -
Supporters of Mr Sunak wait for his arrival ahead of the campaign launch. Bloomberg -
Mr Tugendhat makes a speech at the launch of his campaign. PA -
Mr Javid mops his brow while launching his campaign. Getty -
Ms Truss leaves for work after her announcement that she would be running for the leadership of the Conservative Party. Getty
Penny Mordaunt, a former Tory leadership contender who has thrown her support behind Ms Truss, insisted she had been misinterpreted.
“It’s not that she’s ruling out all future help — that’s a misinterpretation of what she said," Ms Mordaunt told Sky News.
“What she is looking at, though, is enabling people to keep more of the money that they earn."
But supporters of Mr Sunak accused Ms Truss of another about-face after she last week retreated on proposals to cut public sector pay outside London.
Former chief whip Mark Harper tweeted: “Stop blaming journalists [again] — reporting what you actually say isn’t ‘misinterpreted’.
“Second time in just five days. This kind of thing happened under the current PM and hugely damaged trust in us all.
“So just what does ‘not giving out handouts’ mean then?”
Ms Truss has also faced criticism of her plans to use a September emergency budget to immediately reverse the national insurance rate rise brought in by Mr Sunak when he was chancellor.
“I would use it to immediately tackle the cost-of-living crisis by cutting taxes, reversing the rise on national insurance and suspending the green levy on energy bills,” she wrote in The Sunday Telegraph.
Former Tory party co-chairman Oliver Dowden, who is backing Mr Sunak, said Ms Truss's proposed tax cuts were “insufficient” to help low-income workers and would disproportionately benefit those better off.
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“You’re going to see energy bills going up to almost £4,000 ($4,820) and if you look at the idea of the tax cuts, this idea of reversing the national insurance contributions, that’s only going to benefit someone working full-time on the national living wage by less than £60," Mr Dowden told the BBC.
“Contrast that with whoever the prime minister is, they’re going to get a benefit of about £1,800.
“So this isn’t the way to help people through this very difficult period.”
Mr Sunak would go further than the extra £1,200 he offered to the poorest in society as chancellor, his allies suggested. He has also pledged to axe VAT on fuel bills.
Mr Dowden told Sky News that Mr Truss “has put her emphasis on this tax cut”, while Mr Sunak accepts the need for “bold, big interventions” to ease the burden on cash-strapped families.
He said the crisis called for an “intervention on a considerable scale” and pointed out that changes could be made without an emergency budget.
“So if you look at the £1,200 that was announced earlier ... that wasn’t through an emergency budget, but I think there is no doubt that we do need an intervention of a considerable scale to deal with this, because we have to be honest with people about the scale of the challenge that they are facing," Mr Dowden said.
On the energy price cap, he added: “Let’s see when we know the exact level of the price cap, but if it looks like it’s going to be at that kind of scale then of course we’ll need further intervention.”
The price cap is expected to rise to £3,359 in October and to £3,616 in January 2023, according to forecasts by energy regulator Ofgem and analysts from Cornwall Insight.
Ofgem has said that households face a “very challenging winter” amid surging inflation caused by geopolitical tensions and uncertainty over Russian gas supplies.
Everything you need to know about Liz Truss - video
Tory MP Damian Hinds conceded the existing package was not enough in these “extraordinarily difficult times”.
“Things have been getting worse even since that was put into place in terms of projections for energy bills … and [Mr Sunak's] been clear that more may well be needed and he is ready to do that as required,” Mr Hinds told Sky News.
Writing in The Sun, Mr Sunak ripped apart his rival’s plan to deal with the cost-of-living crisis, saying it would “give a big bung to large businesses and the well-off, leaving those who most need help out in the cold”.
He claimed Ms Truss's plan to slash corporation tax would not benefit small businesses, but rather “put money back in the coffers of the biggest companies with the largest profits”.
“These tax cuts simply won’t touch the sides,” Mr Sunak said.
Gordon Brown, a former Labour prime minister, has called for an emergency budget before a “financial time bomb” explodes this winter.
He said that millions of people risk being pushed “over the edge” if the government does not address the crisis gripping the nation.
Mr Brown said Ms Truss and Mr Sunak should work with Boris Johnson this week to immediately agree a package, or Parliament should be recalled.
Writing in The Observer, Mr Brown said: "The reality is grim and undeniable: a financial time bomb will explode for families in October as a second round of fuel price rises in six months sends shock waves through every household and pushes millions over the edge."
UK Health Secretary Steve Barclay has said the National Health Service is braced for “very serious challenges” this winter.
As the health service continues to tackle huge backlogs more than two years after the Covid-19 pandemic struck, it is facing a triple threat: a potential new Covid wave, the winter flu season and the fallout from the cost-of-living crisis.
Ms Truss and Mr Sunak continue to criss-cross the country seeking support from Tory members to be elected as the next party leader and prime minister.
Voting has begun, with the result to be announced on September 5.
