Battle lines drawn over tax as Liz Truss joins crowded field of PM hopefuls

Key issues are coming to the fore in what is already a wide-open race, as Shehab Khan reports

The battle lines over how much tax the public and businesses pay have been drawn between the candidates hoping to replace Boris Johnson as prime minister.

The former Health Secretary, Sajid Javid, said he'd scrap the rise in national insurance, which was brought in under his watch to help cut NHS waiting times and pay for social care.

One of his predecessors, Jeremy Hunt, also pledged to lower taxes for businesses.

On Sunday night, Foreign Secretary Liz Truss became the tenth candidate, pledging to reverse the national insurance hike and “keep corporation tax competitive.”

Newly appointed Foreign Office minister Rehman Chishti tweeted late on Sunday night that he is also standing, while Penny Mordaunt announced earlier she'd be running too, saying the UK’s leadership “needs to become a little less about the leader and a lot more about the ship.”

Former levelling up secretary Michael Gove, meanwhile, has backed Kemi Badenoch for the leadership, describing the ex-minister as “brave, principled, brilliant and kind” in the Sun newspaper.

The contenders’ timescales for the change are different, with Mr Hunt planning to cut the tax to 15p in his first autumn Budget, while Mr Javid would set a “glide path.”

Mr Javid also said the UK should consider ripping up old EU laws “to make us a more pro-business, wealth-creating, entrepreneurial economy.”

Meanwhile, outsider candidate Tom Tugendhat said he would back the Northern Ireland Protocol Bill if elected leader.

The EU claims the legislation would breach international law but Mr Tugendhat said he would be prepared to argue for it, telling Sky’s Sophy Ridge on Sunday programme: “I have fought for my country in combat, I have fought for my country in Parliament, and I will keep fighting for my country.”

Mr Hunt also said he would press on with the government’s controversial plans to overwrite parts of the post-Brexit treaty.

However, he said he hoped with Mr Johnson out of No 10 the “mood music” of Britain’s relations with the EU might change, and “we could legally negotiate some proper changes to the protocol.”

It comes after two serving Cabinet ministers, Chancellor Nadhim Zahawi and Transport Secretary Grant Shapps, revealed their intention to run for leader in the space of an hour on Saturday.

In addition to Ms Mordaunt, Mr Hunt, Mr Javid, Mr Zahawi, Mr Shapps and Mr Tugendhat, former chancellor Rishi Sunak, Attorney General Suella Braverman and ex-minister Ms Badenoch have launched their own bids.

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Ms Truss had been widely expected to stand and confirmed as much on Sunday night.

Candidates populated the Sunday morning broadcast round, with Mr Hunt, Mr Javid, Mr Shapps and Mr Tugendhat all making appearances to promote their bids.

Mr Hunt billed himself as the most “experienced” hand in the leadership contest and announced that his colleague Esther McVey would be deputy prime minister if he were to win.

He told the BBC’s Sunday Morning programme that there were “a lot of very angry voters” who had abandoned the party in recent months, adding: “They are not going to come back to us automatically and choosing me will be a very strong signal that the Conservative Party has listened to their anger.”

Also speaking to Sunday Morning, Mr Javid gave an insight into his policy plans in a quickfire quiz with presenter Sophie Raworth.

He said that as Tory leader he would keep to the commitment to get to net zero by 2050 and would not scrap the BBC licence fee.

Foreign Secretary Liz Truss had long been expected to launch her leadership bid. Credit: PA

The former Cabinet minister also said he agreed with the controversial Rwanda migrant policy and said he would not rule out another Scottish independence referendum “forever”, but would not have one “at least for a decade.”

He said he would not lock the country down again for Covid, but would not be drawn on whether he would do so for a pandemic of a different kind.

Mr Javid said his tax-cutting plans would cost around £39 billion per year, but this did not include slashing fuel duty further in the short-term, which is also part of his leadership vision.

He said he does not “believe in unfunded tax cuts”, adding: “I will be setting out in the next few days a scorecard which will show exactly how all of that we funded in a sustainable way.”

Mr Javid said he thinks in the current fiscal situation the country can afford to scrap the national insurance hike and still fund the promised boost for the NHS and social care.

But Mr Hunt said he would not reverse the tax rise because “the NHS needs the money” from the health and social care levy.

Mr Shapps advocated for lower taxes, as well as a cut to “red tape.”

The Transport Secretary told Sophy Ridge on Sunday he would introduce the planned 1p income tax cut “immediately” in an emergency Budget.

In addition, he said he wants to “freeze” the proposed increase in corporation tax, pledging: “That is a tax which will not go up.”

Mr Tugendhat emphasised he was a “clean start” candidate.

Tom Tugendhat is also in contention. Credit: PA

Asked about whether he would consider cutting corporation tax as prime minister, he told Sophy Ridge plans by his opponents to do so were “not realistic unless you have a 10-year economic plan.”

He added: “You can’t simply look at each of these taxes as a one-off, you need to look at it as part of a whole. The reality is this economy needs not only lower taxes for growth, but it also needs sound money, and that is why we need to deliver both.”

What happens next?

Following elections to the executive of the backbench 1922 Committee on Monday, the new body will draw up a timetable for the leadership election.

After his acrimonious resignation speech on Thursday, many MPs are anxious to see Mr Johnson out of No 10 as quickly as possible, fearing a summer of “chaos” if he remains.

Watch Boris Johnson's announcement on his resignation in full:

Downing Street however insisted he would not stand aside to allow Mr Raab to take over as a caretaker prime minister.

Labour has confirmed that it will table a Commons vote of no confidence in the government if Mr Johnson refuses to go voluntarily.

In order to succeed, however, it would require Tory MPs to vote with them – or at least abstain in large numbers – which would appear unlikely given it could lead to a general election they are likely to lose.