Liz Truss’ plan to focus on tax cuts to tackle the cost of living – rather than targeted support for low income households – could see people end up on the streets, according to one of her rival’s backers.
Tory MP Kevin Hollinrake, who is supporting Rishi Sunak in the race to become the next prime minister, claimed the foreign secretary needed to stop offering “the magic money tree” to her supporters and instead look at how to help those most in need.
He told Sky News’ Kay Burley: “Talking about tax cuts that would help a low income household to the tune of about £1 a week and still… help a household like mine to the tune of about £30 a week is simply not right.
“These people are going to be on the streets. Things are going to be that bad for some households. You’ve got to provide that target package of support.”
Mr Hollinrake’s comments come as Ms Truss is accused of trying to “avoid independent scrutiny” as she prepares to hold a budget next month without an official economic forecast from the Office for Budget Responsibility (OBR), despite one being ready should she ask.
Having an emergency budget in September – in which Ms Truss plans to make long-term funding pledges if she becomes prime minister – has been a key part of the frontrunner’s campaign to get into Number 10.
But going ahead without an OBR forecast has been branded “worrying” by an economist and expert in government finance, while the team behind Mr Sunak accused her of wanting “to avoid independent scrutiny”.
The foreign secretary has come under criticism for a perceived lack of clarity over her money promises, with veteran former cabinet minister Michael Gove accusing her of taking a “holiday from reality”.
She wants to spend £30m on cutting taxes – like reversing the National Insurance rise and cancelling the uplift in corporation tax – using money that economists no longer think exists due to inflation.
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Ms Truss has also hinted she may spend more money by providing further help to people this winter, despite previously saying she would not.
But Mr Sunak said she would plunge the economy into an “inflation spiral” if she does not choose between tax cuts and providing cost of living support, as it would mean “dangerous” levels of borrowing.
“The reality is that Truss cannot deliver a support package as well as come good on £50bn worth of unfunded, permanent tax cuts in one go,” his team said.
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Labour shadow minister Alex Norris told Kay Burley it was “really frightening [that] at a time when families are really struggling, where people up and down the country are so concerned and that is the conversation being had, the leadership contest doesn’t seem to reflect those concerns”.
His party is calling for both candidates to sign up Labour’s plan to insulate 19 million homes across the country, claiming it could save households an average of £1,000 on their energy bills.
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The OBR provides forecasts for all budgets as part of the founding law of the body, enacted in 2010, and despite being funded by the Treasury, it is fully independent.
While the OBR is ready to provide an analysis for Ms Truss if she asks for it, the former Treasury minister – who counts the chancellor and chief secretary to the Treasury among her supporters – wants to go ahead without it.
A spokesperson for her team said: “The cost of living crisis means immediate action is required. A Truss government would seek to act as soon as possible to help people across the UK, by cutting taxes and introducing a temporary moratorium on energy levies.”
And a source in the Truss campaign told Sky News that a forecast wasn’t necessary for a “targeted fiscal event”.