Liz Truss vows to help stay-at-home mums and dads with tax allowances

Liz Truss vows to help stay-at-home mums and dads: PM hopeful says households could share tax allowances as she denies plans would fuel rampant inflation – but Rishi Sunak warns taxes can’t go down until next Autumn

  • Tory leadership hopefuls Liz Truss and Rishi Sunak are stepping up a gear as they face six-week race for No10
  • The Foreign Secretary has described her desire to build an ‘aspirational nation’ as she pushed for the top job
  • She admitted she was ‘wrong’ to back Remain in the 2016 referendum and denied tax cuts would fuel inflation
  • Ms Truss slammed ‘Treasury orthodoxy’ but Rishi Sunak insisted he is the Thatcherite option in the contest
  • Mr Sunak’s allies have warned that unfunded tax cuts are the ‘antithesis’ of Tory values for sound money  

Liz Truss made a bold vow to help stay-at-home mothers and fathers today suggesting families could share tax allowances to avoid punishing carers.

The PM hopeful kicked off what promises to be an intense campaign against Rishi Sunak by proposing that households could ‘opt in’ to be treated as a single entity for tax purposes.

The move could be worth thousands of pounds to carers for children or elderly relatives. ‘Hardworking families are the bedrock of a stable society, and one of my top priorities as Prime Minister would be easing the tax burden on families,’ she said.

However, Ms Truss is also facing intense questioning after claiming her tax cuts will not fuel inflation, dismissing that criticism as the ‘economic orthodoxy’ of the Treasury.

Despite figures this morning showing government borrowing in June at the second-highest level ever, and interest on the £2.4trillion debt mountain setting a new record of £19.4billion, Ms Truss used a bullish interview on BBC Radio 4’s Today programme to argue that tax cuts were the way to restore the UK’s fortunes. 

She warned that the current tax plans put in place by Mr Sunak when he was Chancellor – which include an increase in corporation tax from 19 per cent to 25 per cent in April – will lead to recession.

Mr Sunak’s allies have been making clear he will stick to his approach – insisting that while taxes will be cut that cannot happen until next Autumn, when inflation should have eased.

The campaign is ramping up after Tory MPs picked the final pair for the head-to-head run-off – with the prize for winning the ballot of party members the keys to No10.

The new PM will take over from Boris Johnson at the start of September, but they have a gruelling six-week schedule of hustings and media appearances to navigate first. 

The candidates have already held hustings behind closed doors with Tory councillors in Westminster, and Ms Truss has been visiting a charity in Peterborough. 

Ms Truss has been visiting the charity Little Miracles in Peterborough to speak about cost-of-living pressures

Liz Truss (right) ramped up her campaign after Tory MPs voted her into the head-to-head run-off against Rishi Sunak (pictured left addressing Tory councillors today) – with the prize for winning the ballot of party members the keys to No10

Interest paid in June was more than double the same month last year, and a peak since records began in 1997

The debt interest costs in June dwarfed all previous monthly figures since records began in 1997  

New figures showed borrowing in June was the second-highest on record

The government plunged deeper into the red today as interest on the £2.4trillion debt mountain hit an eye-watering new record.

The UK racked up another £22.9billion borrowing in June, the second highest on record, and driven mainly by an incredible £19.4billion for servicing debt.

That was more than double the same month last year, and a peak since records began in 1997. It is just under half annual defence spending.

Large portions of the government’s debt stocks are linked to RPI inflation which has been soaring even higher than the headline CPI rate. 

Chancellor Nadhim Zahawi said he ‘recognised’ the risk to the public finances, and the government was acting to reduce the debt burden.

The independent OBR watchdog has predicted that interest payments will be £87billion this financial year. 

However, the grim data will raise questions about how tax cuts being pledged in the Conservative leadership battle could be achieved. 

Former Cabinet minister Robert Jenrick, a supporter of Rishi Sunak, took a swipe at rival Liz Truss this morning saying unfunded tax promises were the ‘antithesis of Thatcherism’.

‘Of course we want to cut taxes but let’s manage the economy responsibly,’ he told BBC Radio 4’s Today programme. 

The plans put forward by Ms Truss to allow households to share their personal tax allowances would build on the existing tax break for married couples, first promised by David Cameron in 2005.

At present, one member of a married couple who earns under the £12,570 income tax threshold can transfer £1,270 of their allowance to their spouse, reducing their tax bill by up to £252 a year.

The eligibility could be extended to all cohabiting couples, and the size of the tax break dramatically increased.

No final decisions have been made on what proportion of their personal allowance would be transferable, and the policy has not been costed yet.

However, it is thought officials will consider allowing people to transfer their full £12,570 personal allowance to a partner.

That would be worth up to £2,514 a year per couple.

Stay-at-home parents or those who work part time would be among the main winners.

Ms Truss said: ‘Hardworking families are the bedrock of a stable society, and one of my top priorities as Prime Minister would be easing the tax burden on families. They don’t just look after themselves but also build communities, charities and even businesses.

‘I want to make sure that our tax system works for them. We will review the taxation of families to ensure people aren’t penalised for taking time out to care for their children or elderly relatives.’

The Truss campaign said the approach would reflect models used in Germany and the United States.

However, she is facing questions about the safety of her economic approach. 

Asked this morning what the current level of debt interest is, Ms Truss said: ‘I know we’ve got significant debt interest… tens of billions of pounds.’

But she added: ‘We have got the highest taxes for 70 years and we have got lower debt than the United States, than Japan, than Canada.

‘No other countries are raising taxes.’

She said: ‘My tax cuts will decrease inflation… We have had a consensus of the Treasury, of economists, with the Financial Times, with other outlets, peddling a particular type of economic policy for 20 years. It hasn’t delivered growth.’

Ms Truss, a former Treasury chief secretary, said: ‘What I know about the Treasury, from having worked there, is they… do have economic orthodoxy and they do resist change.

‘What people in Britain desperately need now is change. We need to unleash investment in our country, we need to get the EU laws off our statute books and be attracting more funds – for example from pension funds – into high-growth businesses.’

She said reducing National Insurance and cutting corporation tax ‘increases the supply side of the economy’.

‘The reason we have inflation is it’s a supply shock, combined with a slightly loose monetary policy over time.’

She added: ‘It’s not a gamble, it’s an economic reality that the higher taxes you have the more growth is choked off.’

Ms Truss, who has been guiding the Northern Ireland Protocol Bill through Parliament, said she now recognised the ‘opportunities’ from Brexit. 

‘I fully embraced the choice that the people of Britain have made,’ she said. ‘I was wrong and I am prepared to admit I was wrong.

‘Some of the portents of doom didn’t happen and instead we have actually unleashed new opportunities.’

The Cabinet minister also denied that she has been modelling herself on Margaret Thatcher – despite comparisons when she wore a ‘pussy bow’ outfit during one of the TV debates, posed in a tank, and donned a furry hat on a visit to Moscow.

‘I am my own person,’ Ms Truss said, adding on GB News: ‘It is quite frustrating that female politicians always get compared to Margaret Thatcher, whereas male politicians don’t get compared to Ted Heath.’

She also joked that as PM she would not have time to think about changing the infamous gold wallpaper in No 10 – a reference to Mr Johnson’s controversial refurbishment of his grace-and-favour flat.

‘I’m not going to have the time to be thinking about the wallpaper in No 10, because we’ve only got two years until the general election – we need to hit the ground running,’ she said.

She told the programme she is a fan of 1980s music, with I Wanna Dance With Somebody by Whitney Houston her go-to karaoke song.

The candidates have pledged to focus on positive policies. Despite refusing to answer questions about whether he would include Ms Truss in his Cabinet yesterday, Mr Sunak wrote in the Telegraph that he ‘likes’ and respects the Foreign Secretary.

Ms Truss was asked this morning whether would she rule out either working over Mr Sunak or working under his leadership, depending on the result of the contest.

She said: ‘No, I wouldn’t.

‘During this leadership election so far, we’ve had fantastic candidates present themselves, like Penny (Mordaunt), Kemi (Badenoch), Tom Tugendhat and Rishi, and we need to make sure that those talents are being fully used as part of the new Conservative vision.’

However, Sunak ally Robert Jenrick took a series of swipes as he said the former Chancellor is the ‘Thatcherite candidate’.

‘It is the antithesis of Thatcherism to be going around making unfunded tax pledges merely to win a leadership contest,’ the former housing secretary and Sunak backer said.

He said his fear is that if taxes were cut immediately by Ms Truss as prime minister, inflation could soar.

‘Rishi is clear – he is going to cut taxes, he is going to cut personal taxation. He is going to do that before the end of this Parliament – that isn’t a very long time to wait,’ Mr Jenrick told Today.

He pointedly said that his candidate was ‘never a member of the Lib Dems’, a reference to the former party allegiance of Ms Truss.

He called Mr Sunak a ‘traditional Conservative’.

‘He joined the Conservative Party early in his life, he was never a member of the Lib Dems, he was a conviction Brexiteer.’

Writing in the Daily Mail today, Ms Truss set out an agenda that would see her pursue Mr Johnson’s freedom-loving instincts while reversing Mr Sunak’s high-tax agenda.

In an attack on the former chancellor’s record, she said the Government has been ‘going in the wrong direction on tax, with the tax burden at its highest in 70 years’.

She pledged to hold an emergency budget to push through immediate tax cuts to ease the cost of living and encourage enterprise.

‘We cannot have business-as-usual managerialism on the economy,’ she writes.

‘I am the tax-cutting candidate who will help squeezed families by reversing April’s national insurance rise and suspending the green levy on energy bills.’

Ms Truss also promises to take on the ‘Whitehall Blob’ to drive through ‘tax-cutting, enterprise boosting, business-friendly Conservative policy’. And she signals that she will take on the Left in the ‘culture wars’.

‘The British people can trust me to govern as a Conservative,’ she writes. ‘I won’t apologise for Britain or who we are as a nation and will stand up to people who talk down our country, our history and our values. I reject dehumanising identity politics, cancel culture and the voices of decline.’ 

Ms Truss’s comments came as bookies installed her as favourite to claim the Tory crown. 

Mr Sunak topped yesterday’s final ballot of MPs with 137 votes, but he faces a frantic few weeks to convince Tory party members to back him. 

His final tally was well short of the 200-mark once predicted by allies and means he enters the second phase of the contest without an indisputable mandate from Tory MPs. 

Multiple polls have suggested he starts the race less popular than Ms Truss among the party faithful.

Prime Minister Boris Johnson is pictured during his last PMQs on Wednesday before parliament breaks up and a new Tory leader and PM is expected to be elected in September 

Penny Mordaunt was pictured looking down as she tumbled out of the Tory leadership race yesterday 

The former chancellor, whose resignation triggered Mr Johnson’s downfall, claimed he was the only candidate who could beat Labour at the next election.

‘We need to restore trust, rebuild the economy and reunite our country,’ he said. ‘I’m confident we can do that and we’ve got a really positive message to take out to all our members now – crucially, who is the best person to beat Keir Starmer and the Labour Party at the next election? I believe I’m the only candidate who can do that.’

Mr Sunak, Ms Truss and Penny Mordaunt were the final three in the parliamentary phase of the contest yesterday.

But Ms Truss leapfrogged Ms Mordaunt into second place in the last round, securing the backing of 113 Tory MPs. 

Trade minister Ms Mordaunt was second in all earlier rounds of voting but her campaign hit the buffers and she slipped into third place with 105 votes. She said: ‘We must all now work together to unify our party and focus on the job that needs to be done.’ 

Her allies later attacked the media for highlighting her changing views on issues like trans rights and claims that she failed to pull her weight as a minister. 

Mr Sunak and Miss Truss will now campaign to win the votes of up to 200,000 Conservative Party members. Ballot papers will begin to land on doorsteps from August 1, and the ballot closes on September 2. The first of 12 regional hustings for party members will be held in Leeds next Thursday.

The result of the contest will be announced on September 5, and the winner is expected to replace Boris Johnson as prime minister the following day. 

I’ll beat Labour by governing as a true tax-cutting, freedom-loving Conservative

By LIZ TRUSS, Foreign Secretary 

In these tough times, the Conservative Party is rising to the moment. I am proud to have attracted a broad base of support among my parliamentary colleagues for the leadership. Every candidate who stood has contributed enormously. I am now looking forward to making my case to Conservative members across our great country, and also to the wider public.

Over the next few weeks, I will be setting out a bold new plan that I will have ready to go from day one in Downing Street.

I will hit the ground running by immediately cutting taxes, growing our economy and unleashing the potential of everyone in the United Kingdom. This is a key part of my mission to build an aspiration nation, where people from all parts of Britain, from all backgrounds, can succeed on the basis of their talent and hard work alone.

That is how I got to where I am today, and that is what I want for everyone in our country.

Liz Truss greets British Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng

Miss Truss’ supporters cheer as she makes the final two in the Tory leadership contest 

I didn’t come from a traditional Conservative background. I grew up in Paisley and went to a comprehensive school in Leeds. I remember the lip service paid to equality, only for children from disadvantaged backgrounds to be let down.

I entered politics to stop this ‘soft bigotry of low expectations’ and bring equality of opportunity for all. My approach is rooted firmly in Conservative values of aspiration, enterprise and freedom, which I know are shared across the country.

As prime minister, I will work night and day to deliver on my promises. I will be relentlessly focused on the people’s priorities, from the cost of living to seizing the opportunities of Brexit, to making the streets safer. The central issue at the next election is going to be the economy. We have been going in the wrong direction on tax, with the tax burden at its highest in 70 years. The central battleground will be about whether we go for growth and cut taxes, or carry on with business as usual and tax rises.

Liz Truss addresses her supporting Conservative MPs as she make the final two 

We cannot have business-as-usual managerialism on the economy. I am the tax-cutting candidate who will help squeezed families by reversing April’s national insurance rise and suspending the green levy on energy bills. I will move to bring in an emergency budget to get on with doing this quickly, and announce a spending review to find more efficiencies in government spending.

I will drive tax-cutting, enterprise-boosting, business-friendly Conservative policy through the Whitehall Blob to help working families.

The British people can trust me to govern as a Conservative. I won’t apologise for Britain or who we are as a nation and will stand up to people who talk down our country, our history and our values. I reject dehumanising identity politics, cancel culture and the voices of decline.

I am determined to win the fight for freedom at home, namely the freedom for people to live the lives they want. The economy isn’t just about numbers on a spreadsheet but livelihoods, hopes and ambitions. That is why I would drive decisive reforms to unleash people’s potential and advance equality of opportunity.

I believe in Global Britain’s great potential as a sovereign nation.

Sir Graham Brady (third from left) chairman of the 1922 Committee, announces the results of the ballot giving the final two candidates, Liz Truss and Rishi Sunak 

As prime minister, I will accelerate our regulatory divergence from the EU and create new low-tax opportunity zones to drive growth and investment across the country.

I will help Britain lead the world in tackling aggressors and in advancing and defending freedom and democracy, continuing to take as tough a position on Vladimir Putin as prime minister as I have as Foreign Secretary.

This is a defining moment for the country. The global economy is in difficulty, we face a cost of living crisis here at home, and our enemies are emboldened abroad. To steer our way through the storm, we need strong leadership and a bold approach that takes our economic policy in a new direction.

I will beat Labour in 2024 by governing as a true tax-cutting, freedom-loving Conservative. We know Conservative principles of low tax, equality of opportunity and a strong national defence are what the majority of the British people want. That is exactly what I will deliver.

As prime minister, I will lead us to economic growth, remain true to my Conservative philosophy and deliver for families up and down the country.

The British people can trust me to do what is necessary and right.

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