Tory leadership race: Tory hopefuls turn on Rishi Sunak’s tax policies — follow live | News
The Conservative leadership election begins formally today, dominated by an increasingly bitter row over tax that could well decide Britain’s next prime minister.
Liz Truss, Nadhim Zahawi, Sajid Javid, Suella Braverman will all be speaking publicly and demanding tax cuts in a full-frontal attack on Rishi Sunak’s economic policy.
Sunak, the early frontrunner, will not appear today but Robert Jenrick, one of his leading supporters, accused rivals this morning of “fantasy tax cuts” and warned them against making promises they could not keep in the race to succeed Boris Johnson. He criticised “entirely unfunded tax cuts in the heat of a Conservative leadership election which has been partly caused by a lack of trust”.
Jenrick insisted that big tax cuts would require an increase in borrowing or spending cuts, arguing that Tory members “understand that these are difficult times and they do require somebody who’s highly economically literate and has a proper plan”.
But Kwasi Kwarteng, the business secretary, who until recently sat at the cabinet table with Sunak and Jenrick but is backing Truss, said: “Tax rates are very, very high. Do we want to continue on that path or reset or try something else?”
Kwarteng said that the priority was boosting growth, and “we don’t do that by rising taxes to the highest levels since 1949. That doesn’t make any sense whatsoever”. He said Truss had argued privately against the national insurance rise introduced by Sunak to fund the NHS.
Tom Tugendhat, who is pitching himself as a fresh start having never served in government, pointed out that he was one of a few Conservative MPs to vote against the national insurance “tax on jobs”. “I certainly think that we should be looking to lower taxes across every aspect of society,” he added.
As the contest begins in earnest, the prime minister has spent the morning on a visit to the Francis Crick Institute
LEON NEAL/GETTY IMAGES
An expedited timetable is expected to be agreed after elections to the 1922 Committee of Tory backbenchers this afternoon. This will set a high bar for candidates to get on the ballot paper — with the backing of 20 to 36 MPs, or 10 per cent of the parliamentary party, being suggested — in an effort to thin out of a field of 11 declared candidates so far. MPs will winnow them down to a final two so that a choice can be put to members once parliament’s summer recess begins on Thursday next week.
The accelerated debate will become a battle for the future of the party’s economic policy: if members accept Sunak’s argument, then he is on course to win. But if they insist on faster tax cuts, the contest is wide open to become the standard bearer of the right.
Johnson avoids giving ‘damaging’ endorsement
Boris Johnson has said his endorsement would “damage” any candidate to succeed him, as a leading northern Conservative urged Tory rivals to focus on levelling up as well as tax cuts (Chris Smyth writes).
The prime minister refused to say whether he felt betrayed by his MPs after criticising the Tory “herd” in his resignation speech. “There’s a contest under way and it’s happened, and, you know, I wouldn’t want to damage anybody’s chances by offering my support,” he said during a visit to the Francis Crick Institute in London to highlight the importance of science to Britain’s future.
Ben Houchen, Conservative mayor of the Tees Valley, said he was “frustrated” that candidates to succeed Johnson were not talking about how to boost growth in neglected areas.
The prime minister would not say if he felt betrayed by MPs
LEON NEAL/GETTY IMAGES
He told Times Radio: “I just find it really frustrating as a contest at the moment that we’re just deciding whether cutting taxes or not cutting taxes is the right or wrong thing. As I’ve just said, it depends on the rest of the policy.”
Criticising a “very narrow” focus on tax cuts, he argued: “Whether you want to cut taxes or not is informed by the policy that you want to implement as a government. Now, one of those key policies is levelling up. And at the moment, I am frustrated that there is little to no conversation about levelling up.”
Johnson’s allies are considering whether to back Liz Truss or Priti Patel as a candidate to beat Rishi Sunak, and Truss is pitching to be a lower-tax version of Johnson.
Her allies insist she will continue Johnson’s levelling-up plan, but is likely to use a different name to emphasise the goal of spurring private sector investment rather than using government money.
A spokesman for her campaign said: “The next prime minister has to be someone who unites the red and blue wall, has a clear vision for the country and economy based on Conservative principles, and has the experience and track record to deliver that vision and hit the ground running on day one. Liz is the only candidate who ticks all of those boxes”.
Truss started campaign website a month ago
Liz Truss registered her official website to become the next Tory leader almost a month before Boris Johnson resigned (Oliver Wright writes).
The website lizforleader.co.uk went live at the weekend as part of the foreign secretary’s campaign to succeed Johnson as prime minister.
But a search for the domain name — first carried out by Sky News — shows that it was registered on June 8, 2022.
This was two days after Boris Johnson narrowly won the 1922 Committee vote of confidence, during which Truss publicly supported him.
Liz Truss registered the site two days after Boris Johnson won a vote of confidence
JOSHUA BRATT FOR THE TIMES
Rishi Sunak and Tom Tugendhat both registered their websites last week on July 6 and 9 respectively. Most of the candidates do not appear to have campaign websites yet.
Penny Mordaunt’s pm4pm.com was registered on May 24, 2019 — the day that Theresa May announced her resignation. Mordaunt did not end up running in that contest but kept the domain name.
Using the tagline “trusted to deliver”, Truss kicked off her campaign with a slick video highlighting her work on trade deals and the controversial Northern Ireland Protocol Bill. She said that a prime minister with “experience, who can hit the ground running from day one” was needed, in a possible dig at rivals without cabinet experience.
While such Machiavellian tactics are unlikely to damage her campaign among Tory MPs — who were well aware of her longstanding leadership ambitions despite protestations of loyalty to Johnson — it could cause her difficulty later in the race.
A good proportion of Tory members still support Johnson, and the actions of the final two candidates in the days leading up to his resignation are likely to come under scrutiny.
Chancellor rows back plans to slash government budgets
Nadhim Zahawi has rowed back on proposals to cut every government department’s running costs by 20 per cent to fund his tax-slashing promises (Geraldine Scott writes).
The chancellor had suggested on Sky News that he would force all departments to make cuts, pointing to his record at the Department for Education. When asked how he would cut taxes as pledged he said: “Nothing’s off the table.”
The majority of those vying to be Conservative leader have pledged tax cuts, except for Rishi Sunak, who has said the country cannot tell itself “fairytales” over the state of the economy. But few have set out how they would achieve the promises.
Zahawi told Sky News: “I think it’s only right that across government we do this exercise, it’s an important exercise. It’s only right that we exercise fiscal discipline when it comes to public-sector pay.”
However, the team behind his leadership bid sought to clarify that he meant a 20 per cent reduction in civil servants, which has already been proposed by Boris Johnson.
Sajid Javid said yesterday that his plans would cost about £39 billion a year and insisted he did not “believe in unfunded tax cuts”. He promised a “scorecard” showing how it could be achieved, and said he would ask for “efficiency savings” from all departments by 2024.
Liz Truss has promised to “start cutting taxes from day one”. Kwasi Kwarteng, the business secretary who is backing Truss, said it was accepted that public spending would need to be reduced.
The Institute for Fiscal Studies (IFS) has warned the candidates that to avoid having to hike taxes again in coming years they would have to scrap certain benefits or make cuts to the NHS.
Robert Jenrick, who is backing Sunak, said that Tory “credibility” was at risk by candidates promising cuts. “Announcing fantasy tax cuts to help get through a leadership election, I think, is unwise.”
Analysis: candidates must play to two galleries
The Tory leadership election has two audiences, Tory MPs and Conservative party members. It would be risky to assume they want the same thing (Chris Smyth writes).
It is often assumed that Tory members are more unbendingly right-wing than MPs, yet although polling suggests there is some truth to this idea on social issues the reverse is true on the economy.
While Rishi Sunak is being pilloried by rivals over his tax rises and spending, the evidence suggests that this could hurt him more in the first round of the contest. If he gets to the final two, members could be more understanding.
Surveys by the British Election Study and others, published in the journal Political Studies last year, show that on questions about redistribution, big business and the fate of ordinary working people, Conservative voters are slightly to the right of the average voter, members are further right but MPs are significantly more likely to hold classical right-wing positions. Hence the clamour today to offer tax cuts.
Priti Patel is likely to enter the race today
JESSICA TAYLOR/UK PARLIAMENT/AP
On values, it is a striking finding that the average Conservative MP is more socially liberal than the average voter. Tory MPs are far less likely to support the death penalty, bemoan young people’s lack of respect and call for stiffer sentences than voters as a whole. Members, by contrast, are far to the right of voters on most of these issues.
No surprise, then, that all candidates in the leadership election have pledged to keep the policy of deporting some asylum seekers to Rwanda, which has caused significant queasiness among many Tory MPs.
The views of Tory voters on such issues may boost the hopes of Priti Patel, who is likely to enter the race today and will feel she has a chance as the “authentic” right-wing candidate if she can make it to the final two.
Yet both Tory MPs and members will be selecting a leader with half an eye on the wider electorate: they know they need a leader who can win the country as a whole. They will be second guessing each other and the voters. They will also need to be mindful that what might be wildly popular in some constituencies will be toxic in others.
Added to that is the fact that, as Jeremy Corbyn discovered, even espousing policies which might themselves be individually popular can contribute towards painting a leader as extreme or dangerous.
These overlapping layers of calculation mean that it is still very hard to predict who will become Britain’s next prime minister by the end of the summer.
I’m being smeared with tax rumours, says Zahawi
Nadhim Zahawi has said he is “being smeared” by stories about his tax affairs as senior Tories become alarmed about the bitter tone of campaigning in the leadership election (Chris Smyth writes).
The chancellor has denied claims that the National Crime Agency or HMRC have been investigating irregularities in his finances — but promised to release his tax returns as prime minister, in a move aimed at Rishi Sunak.
Nadhim Zahawi has said he will publish his tax accounts each year if he becomes prime minister
With innuendo and unsubstantiated allegations about rival camps being thrown around, already Sunak has had to deny claims by Nadine Dorries, a close ally of Boris Johnson, that he is working with Dominic Cummings, formerly Johnson’s chief adviser. Yesterday Tory MPs were sent a 400-word attack on Sunak that said there was “nothing Conservative about [his] big tax and big spend agenda”.
This morning Zahawi lashed out at reports of investigations into his business career. “I was clearly being smeared. I was being told that the Serious Fraud Office that the National Crime Agency that HMRC are looking into me. I’m not aware of this . . . I’ve always declared my taxes. I paid my taxes in the UK,” he told Sky News.
He joined Sajid Javid and Jeremy Hunt in promising to publish his tax returns if he progressed in the contest, saying: “We need to take this issue in many ways off the off the table. I will publish my accounts annually. That’s the right thing to do. It’ll make a difference to the country going forward if all prime ministers publish their tax returns.”
Sunak, who has been damaged by revelations of his wife’s non-dom tax status and faces scepticism about whether he is too rich to lead a country suffering a cost of living crisis, has not made a similar pledge. Allies said it would be “presumptuous” to consider what he would do if he made the final stages of the contest.
This morning George Eustice, the environment secretary, who is backing Grant Shapps, the transport secretary, said that “of course” he was worried by negative campaigning. “We are all colleagues in the same party and it’s incredibly important for people, whoever wins, to put the party back together to pull things back together and therefore the tone that people adopt in this campaign really matters,” he told LBC.
Conservative leadership election formally begins
Good morning and welcome to The Times’s live coverage as the Tory leadership election formally begins today. Elections to the 1922 Committee of Tory backbenchers will be held this afternoon, following which the committee is expected to agree the timetable for how the leadership contest will take place. Meanwhile, several of the 11 contenders are out and about this morning, pushing their low tax credentials.
Jeremy Hunt is among those who have entered the race
GEORGE CRACKNELL WRIGHT/LNP