The Conservative leadership frontrunner is leaning towards targeted support over help for all to ease the cost of living crisis, said the Liz Truss campaign team on Monday, but maintained she is not “ruling anything out” at this stage.
The country is still in the dark about exactly how either candidate would act to take the sting out of sky-high energy bills this winter as the leadership campaign enters its final week.
The government is drawing up options for the next prime minister, said Conservative minister Victoria Prentis who argued that targeted support is needed.
“I would like to reassure that there are many, many different plans being worked on by civil servants and ministers at the moment, and whoever comes in as the next Conservative leader and our next prime minister will have the background work ready and will be able to make those difficult choices very quickly and before it’s needed,” she told Times Radio.
“We need to make sure that while we will be providing some general support, … most of our support goes to those really vulnerable households”.
But former chancellor Alistair Darling condemned the government for “fiddling around with small measures” as he called for bold action to avoid a “lethal cocktail” of skyrocketing energy prices, recession and high inflation.
“You need something significant and substantial and you need it now, because people’s bills are going to start coming in in a few weeks time," he told BBC Radio 4’s Today programme.
“If you don’t do that then you have the risks that I’ve been describing, that the economy will slip into recession with all that entails.
“And when you’ve got that on top of the fact you’ve got inflation already at very, very high levels we haven’t seen since the 1970s, this is a lethal cocktail, which is why it needs bold action taken by the government now, not fiddling around with small measures that frankly won’t make any difference at all.”
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
The Labour ex-chancellor added that the lesson he learned in the 2008 financial crisis was that government had to do “more than people expect”.
He said cutting income tax, a measure Ms Truss is reportedly considering, would benefit people at the higher end of the income chain, but not those paying little or no tax.
Ms Truss is also mulling slashing VAT by 5 per cent across the board as a “nuclear” option, according to reports over the weekend, a move described as “regressive” by her rival Rishi Sunak’s team.
Paul Johnson, director of the Institute for Fiscal Studies, said the proposal was “inappropriate” and risked exacerbating inflation, as he also warned against slashing income tax on top of other tax cuts.
“You clearly can’t do all of this without completely crashing the public finances,” he told The Times.
“This simplistic mantra that you cut taxes and the economy grows more, that you cut taxes when you have a big deficit and high inflation, and you don’t do it with any other part of the plan, is quite worrying”.
Everything you need to know about Liz Truss - video
The BBC on Sunday reported that Ms Truss had “ruled out” direct support for every household to assist with soaring bills.
But a source from the foreign secretary’s team later said that, while she is more attracted to targeted assistance, she has not yet ruled anything out.
“Liz has been clear we need to lower the burden of taxation and focus on boosting energy supplies and this will be her priority as prime minister,” they said.
“She’s also been clear further support may be required to help.
“Her preference is to target this to those most in need, but isn’t ruling anything out.”
Ms Truss claims it is not “right” to announce her full plan before the contest is over or she has seen all the analysis being prepared in Whitehall.
Mr Sunak has also said he favours “caution against providing definitive answers before getting into Downing Street”, adding it is “responsible” to first have “full command of the fiscal situation”.
Everything you need to know about Rishi Sunak - video
Critics point to the contrast with action being taken by European governments to deal with the crisis.
European Commission president Ursula von der Leyen and German Chancellor Olaf Scholz on Monday pledged an emergency intervention to reform the European electricity market and help bring down prices for customers.
The Sunday Telegraph reported that one option being drawn up by the Treasury for the new prime minister to address the crisis is a 5 per cent cut to the the 20 per cent headline rate of VAT, saving the average household more than £1,300 per year.
But The Sun suggested Ms Truss is being pressured by allies to slash the rate even further – down to 10 per cent.
It came as The Times released new polling suggesting nearly half of current Tory voters want Britain’s energy industry to be renationalised.
The newspaper reported that 47 per cent backed returning energy companies to public ownership, while 28 per cent opposed it and 25 per cent were unsure, according to the YouGov survey.
The poll, carried out on Tuesday and Wednesday last week, also found that Labour’s plan to temporarily freeze energy bills, valued by the party at £29 billion ($34bn), is supported by 51 per cent of Tory voters, with only 17 per cent opposing the policy.
With the energy price cap set to rise by 80 per cent by October, whoever emerges as Boris Johnson’s successor on September 5 will have a mammoth task on their hands to steer the country through the winter.
Regulator Ofgem warned the government on Friday that it must act urgently to “match the scale of the crisis we have before us” as Britain faced the bleak news that the average household’s yearly bill will rise from £1,971 to £3,549.
Mr Johnson has said that whoever succeeds him in No 10 will announce “another huge package of financial support”.
The outgoing prime minister hinted at the scale of the options to ease the burden being teed up for either Ms Truss or Mr Sunak to consider in an article for MailPlus, as he insisted “we must and we will help people through the crisis”.
