Sunak plans to cancel out energy price rises while Truss set to abolish windfall tax

Sunak vows to help poorest pay energy bills while Truss won't support business profit tax

Britain's Conservative leadership candidates, Foreign Secretary Liz Truss and former chancellor to the exchequer Rishi Sunak. AFP

UK Conservatives leadership candidate Rishi Sunak has set out plans to cover the total cost of rising energy bills for up to 16 million vulnerable people by finding up to £10 billion ($12bn) to battle the effect of this October’s price rise.

Every household would benefit from a £200 reduction in their bills by abolishing VAT on energy, Mr Sunak wrote in The Times.

The former chancellor has announced the plan in a challenge to fellow candidate Liz Truss, who has said only that she would consider the measures.

"You can't heat your home with hope," Mr Sunak said as he attacked his rival for her refusal to set out detailed plans beyond cutting green levies on bills that would save all households about £150 a year.

"People need reassurance now about what we will do and I make no apology for concentrating on what matters most."

Meanwhile, Ms Truss said she would “absolutely” not support a windfall tax.

“One thing I absolutely don’t support is a windfall tax,” the foreign secretary said. "I think it’s a Labour idea.

"It’s all about bashing business and it sends the wrong message to international investors and to the public."

On the billions of pounds in profit made by energy giants, Ms Truss said she would ensure companies in an oligopoly were held to account.

But she said profit was not a “dirty word” and treating it as such is “a massive problem”.

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The hustings came hours after energy companies agreed to work with the UK government to help the people who need it the most, before a further surge in energy bills going into the winter.

The UK’s departing Prime Minister Boris Johnson and Chancellor Nadhim Zahawi led emergency talks with energy companies to discuss how they plan to spend their bumper profits and explore ways to help customers struggling with the soaring cost of living, but no immediate assistance for hard-hit customers was forthcoming.

Instead, ministers were reduced to pleading with companies to act “in the national interest” and help ease the pressure on vulnerable consumers in the face of soaring energy prices.

Officials said Mr Johnson made clear it was vital the Western world continues to stand by Ukraine, even as the war helps drive energy prices up to record levels.

“The government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take,” an official statement read.

At Thursday's hustings event for party members in Cheltenham, Mr Sunak said the government would need to provide more support than previously thought to look after vulnerable people with bills.

With a dire new warning that energy bills could top £5,000 ($6,100) by the spring, the cost of living issue continues to dominate the exchanges in the battle to succeed Prime Minister Boris Johnson.

The two contenders faced further questions on the matter during the hustings on Thursday evening.

Mr Sunak said that if Ms Truss’s plan was followed and financial support not offered, then: "We are going to, as a Conservative government, leave millions of incredibly vulnerable people at the risk of real destitution."

He said this would be a “moral failure” and warned that Ms Truss’s tax plan would not help pensioners and people on “very low incomes”.

“No tax cut, and Liz’s tax plan, is not going to help those groups of people,” Mr Sunak said.

“So scrapping the health and social care levy, as she wants to do, is worth £1,700 to her on her salary.

“For someone working really hard on the national living wage, it’s worth just over a quid a week. And for someone who’s a pensioner, without any earnings, it’s worth zero.

“Now I want to provide direct support to those groups of people.”

UK Conservatives on the leadership campaign trail — in pictures

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

But Ms Truss stood by her tax-cutting plans, warning against “Gordon Brown economics”.

She said that increasing taxes would “choke off economic growth” and send the country to “penury”.

Ms Truss wants to reverse the national insurance rise and planned increase in corporation tax, both of which were introduced by Mr Sunak as chancellor.

Asked if she was for or against “handouts”, she stressed that her “first preference” has always been to “reduce taxes”.

Ms Truss previously hinted she would consider further support for struggling households if she were made prime minister.

She criticised the media, two days after apologising for the same act during the last hustings.

“Today we’re sponsored by the Telegraph and I would love the media to spend more time talking about trade deals,” Ms Truss said.

After the paper’s Camilla Tominey reminded Ms Truss that “you have written for us about trade deals”, she said: “I have written for you on trade deals.

“But the point is that trade deals open the doors for business, but then we need to help businesses actually get their product into market.

“We set up the exports support service to help do that, but I would love to see the press write about that rather than about political rows.”

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At the event, Ms Truss said she would not hold an election before 2024.

“I think that’s a very important point because we’ve got to deliver for people,” she told Tory members in Cheltenham.

Meanwhile, Mr Sunak said scrapping the independence of the Bank of England would be “a massive mistake”.

“I’m very nervous about things I hear elsewhere, about people who seem to think that from Liz’s camp and her that we should scrap Bank of England independence,” he said.

“I think that would be a massive mistake for our country and international investors would not look very highly on it at all.”

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On the defence budget, Mr Sunak said he would invest “whatever it takes to keep all of you and our country safe” but did not give a figure, after Ms Truss said she would increase the defence budget by 3 per cent.

“I’m not going to sit here and tell you 3 per cent, because I don’t believe in arbitrary targets when it comes to something as important as our security.

“What I will tell you is simple: I will invest whatever it takes to keep all of you and our country safe, because that is the first duty of a prime minister, and it’s certainly the first duty of a Conservative prime minister.”