Liz Truss will ‘rush through’ tax cuts to tackle cost of living crisis

·3 min read
Liz Truss - Chris J. Ratcliffe/Bloomberg
Liz Truss - Chris J. Ratcliffe/Bloomberg

Liz Truss will rush through tax cuts up to six months earlier than planned, The Telegraph can disclose, with the Foreign Secretary pledging to “look at what more can be done” to tackle the rising cost of living.

Until now, the Tory leadership contender had been planning to reverse the National Insurance rise from April – in line with usual Treasury rules – after formally announcing the move in an emergency budget in September.

But her team have now established that she can scrap the increase immediately, meaning the change can be implemented within days of the budget and start increasing the pay received by workers from November.

Writing for The Telegraph, Ms Truss confirmed that she would use the budget to “immediately tackle the cost of living crisis by cutting taxes, reversing the rise on National Insurance and suspending the green levy on energy bills”.

A campaign source added: “Based on the advice we have had, we are now confident that we can immediately do the tax cut.”

On Saturday, Rishi Sunak, Ms Truss’s leadership rival, claimed the Foreign Secretary had “ruled out” further “direct support” to households in the autumn, based on an interview in which she said she favoured lowering the tax burden over “giving out handouts”.

But Ms Truss hinted at the possibility of further one-off support for households if she becomes prime minister, writing: “I will look at what more can be done, but the way I would do things is in a Conservative way.

“We would put more money back in the pockets of hard-working people without delay. That is necessary, affordable and the right thing to do at a time when we face the highest tax burden in 70 years.”

Ms Truss’s intervention comes amid growing pressure on her and Mr Sunak to set out plans to help households cope with soaring costs.

A poll by Public First for The Telegraph found more than two in five people believe the Government is not taking the cost of living crisis seriously, while almost two-thirds are already struggling to pay energy bills.

On Saturday, analysts at Auxilione, an energy consultancy, predicted the price cap on energy bills could reach £3,687 in October – close to double the current already record levels – and about £4,400 in January.

According to the survey of 2,011 adults, 55 per cent agreed that the Government could do more to tackle the effect of rising costs but was choosing not to.

Ms Truss also suggested current levels of inflation were “exacerbated” by the Bank of England, as she pledged to “work night and day to tackle inflation”.

She said: “That is why I want to look around the world at what the best performing central banks are doing to control inflation and how we can ensure our Bank is delivering what we need it to deliver.

“In these turbulent times, we need to unite to see our economy and country through to better days. I am ready to work night and day to tackle inflation, get growth going and deliver on our promises to the British people, including the readers of The Telegraph.”

On Saturday, Mr Sunak  said it was “simply wrong to rule out further direct support at this time as Liz Truss has done, and what’s more her tax proposals are not going to help very significantly people like pensioners or those on low incomes who are exactly the kind of families that are going to need help.”

Asked what further help was needed, the former chancellor said: “Well we need to have certainty about exactly what bills are going to be in the autumn.

“But I think people can look at my track record - I announced significant support as chancellor worth up to £1,200 for people and I want to go further as prime minister because the situation is going to be different.”