Rishi Sunak and Liz Truss reject cash payouts for struggling households in latest leadership clash

A split image of Liz Truss and Rishi Sunak.
Liz Truss and Rishi Sunak have both said they are against the idea of cash payouts for British families struggling through the cost of living crisis. Credit: PA

Tory leadership hopefuls Liz Truss and Rishi Sunak have both said they will not offer struggling British families cash payouts to help stave off the effects of the cost of living crisis.

The rivals went head-to-head again on Tuesday night at a Tory party hustings in Darlington, County Durham.

Mr Sunak insisted he would be happy to get in a room with Ms Truss and Boris Johnson to talk about future cost of living support, but said at the end of the day his opponent's tax-cutting plans are “not going to work”.

But Ms Truss said getting in a room with Mr Sunak and Boris Johnson to try and agree on support for rising bills “sounds bizarre”.

In an exclusive interview with ITV News Political Correspondent Daniel Hewitt, Rishi Sunak defended his move to take funding from "deprived urban areas".

Asked if she would get in a room with the Prime Minister and the former chancellor to look at providing additional support, Ms Truss said her focus in government is on her current role as Foreign Secretary.

She added: “We have a Chancellor, Nadhim Zahawi, we have a Prime Minister, who are in those jobs until September, and I think it would be constitutionally deeply undesirable to try and overrule them with a sort of made-up committee of the CBI, me and Rishi Sunak.”

She said the Prime Minister and Chancellor are “capable people, capable of making these decisions”, adding “this kangaroo committee you’re proposing sounds bizarre”.

It follows Tony Danker, director general of the Confederation of British Industry (CBI), saying on Tuesday that the PM and the two contenders to replace him should “come together to agree a common pledge to support people and help quell fears”.

Mr Sunak said that if the most vulnerable people who “most need” support are not given help “not only will millions of people suffer, we will get absolutely hammered when it comes to an election”.

Asked if he would get in a room with Ms Truss and Mr Johnson and decide additional support prior to September 5, the former chancellor said he was “happy to do that”, but the answer to that question is at stake in the contest.

He said: “If you only want to help these people with tax cuts – I’m struggling to see how it’s possible.

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“So we can get in a room all you want, but at the end of the day that policy is not going to work. So if you can get Liz to change her mind on that when she talks to you I’m very happy to get in the room and we can hammer this out.”

Mr Sunak has also suggested he would not offer further cash payments to every household, and would instead target support at the most vulnerable.

Asked if he is prepared to spend another £15.3 billion to help families with the rising cost of living, Mr Sunak said: “I don’t think that will be necessary because what we are talking about now… is the extra increase on top of what we thought.

“And we already thought bills were going to go up to £3,000 when we announced that support.”

“I want to go further than I did previously because the situation is worse. It’s right that we target that on the people who most need our help," he added.

Mr Sunak insisted he would be happy to get in a room with Liz Truss and Boris Johnson to talk about future cost of living support. Credit: PA

“The only way to help them is with direct support because tax cuts alone are not much good if you’re a pensioner who is not earning any extra money.

“They are not much good if you are working hard on the national living wage, because Liz’s tax cut is worth about a quid a week for that person, it’s worth zero for a pension. That’s not right.”

Questioned on whether he is planning support similar to earlier plans of providing £400 to every household regardless of their income, Mr Sunak said: “No, because I think what we need to do is target our support for the most vulnerable.”

Meanwhile, at the same event, Ms Truss branded cash handouts to help with the cost of living as “Gordon Brown economics”.

Pushed on what she would do to deal with rising fuel prices, Ms Truss told the audience: “We are facing great difficulties with energy.

Ms Truss branded cash handouts to help with the cost of living as 'Gordon Brown economics'. Credit: PA

"I understand people are struggling with their bills on fuel and food but the first thing we should do as Conservatives is help people have more of their own money.

“What I don’t support is taking money off people in tax and then giving it back to them in handouts."

She added: “Frankly we had years of that under Labour and what we got was a slow-growth economy and we didn’t get the opportunities, we didn’t get the enterprise, we didn’t get the new jobs in places like Darlington, which is one of the reasons people voted Conservative.

“They voted Conservative because they want to see enterprise, they want to see new opportunities, and that is why it is so important that we don’t raise taxes, that we keep taxes low and also we abolish these EU rules that are holding back investment into our country.”

The Foreign Secretary also said she “fundamentally” disagreed with “putting up taxes and then also giving out benefits” to help with the rising cost of living.

She said: “There’s a fixed pie, we have to share out the pie and we have to give out the money and hand out. My view is that we can grow the pie, and having lower taxes actually helps us generate more income into the economy so there is more money to go around.

“What I fundamentally don’t agree with is putting up taxes and then also giving out benefits. I think that is the wrong approach."

It has already been announced that Prime Minister Boris Johnson will not introduce new measures to help those suffering from the cost of living crisis before he leaves office - due to be in early September.

A spokesman for the PM has instead argued it would be up to his successor to make any decisions on further help.

Boris Johnson will not introduce new measures to help families combat the cost of living crisis before he leaves office. Credit: PA

Speaking at a Downing Street reception on Tuesday, Mr Johnson declared he is “absolutely confident” that whoever becomes the next prime minister “will have the fiscal firepower and the headroom to continue to continue to look after people”.

The PM also said he is “certain” that the next prime minister will want to make announcements about how they will “further help people” struggling to get by.

He said: “In these difficult financial times people are feeling the squeeze across our country and they’re feeling the impact in particular of the energy price spikes that are being caused by Putin’s war in Ukraine.

"And of course it’s right that the government is doing everything that we can to help and we’re putting £1,200 into the pockets of the eight million most vulnerable households and £400 for everybody to help with the cost of energy, £300 for pensioners, £150 off council tax, and the money will keep coming in throughout the autumn, more coming in September and October.”