Liz Truss has pledged to cut taxes “immediately” if she wins the race for No 10, adding she would call for an emergency budget and tackle the cost of living crisis by “reversing the rise in National Insurance” .
The Foreign Secretary has also ruled out “handouts” to help households overcome the worst income squeeze in 60 years.
It comes as Tory leadership hopefuls have clashed over how best to help households amid the cost-of-living crisis.
Former chancellor Rishi Sunak has called Ms Truss’s tax plans “simply wrong”.
Mrs Truss wants to fast-track her plan to scrap the National Insurance increase by six months, implementing the change within days of a September emergency budget rather than waiting until April in accordance with the Treasury’s usual rules, according to the Sunday Telegraph.
“I would hit the ground running by bringing in an emergency budget, charting a firm course to grow our economy to help fund our public services and the NHS,” Ms Truss wrote in the paper.
“I would use this to immediately tackle the cost of living crisis by cutting taxes, reversing the rise in National Insurance and suspending the green tax on energy bills.”
The Foreign Secretary told reporters during a campaign visit to the West Midlands on Saturday: “Under current plans, what we know is that Britain is headed for recession.
Picture: Liz Truss at an event at Solihull Moors FC
“This is not inevitable, but we must avoid it by making sure our economy is competitive, that we encourage business to grow and that we are keeping taxes low.
“Having the highest taxes for 70 years will not generate that economic growth and is driving our country into recession.”
Meanwhile, his opponent, Sunak, hit back and said: “We have to be real about this situation.
“It is simply wrong to rule out more direct support at this time, as Liz Truss has done, and what’s more, her tax proposals will do little to help people like pensioners or those on low incomes, who are exactly the kind of families who will need help “.
Tax cuts could fuel inflation: forecast to top 13%
Earlier this week, in an interview with the Financial Times, Ms Truss insisted she would go ahead with the tax cuts, despite claims they would fuel inflation, which is already forecast to exceed 13%.
Asked how he intended to help households facing spiraling energy bills this winter, he insisted the answer was tax cuts and supply-side reforms.
Former deputy governor of the Bank of England, Charles Bean, told Sky News that Mrs Truss’s plans were “not particularly well targeted in terms of dealing with the people most affected” by the rise in the price of energy
He added: “The existing package that the previous chancellor Rishi Sunak put in place had a more conscious focus on poorer households and I think it’s pretty clear that any fiscal maneuvering we have at the moment would have to address primarily to them and not more broadly.”
Image: Rishi Sunak descends from the Hovercraft towards the Isle of Wight
Conservative voters rally behind Truss
Ms Truss has taken a seven-point lead as prime minister against Sunak (27% to 20%) and a 26-point lead among Conservative voters in 2019 (48% to 22%).
Opinium’s research found across all leadership attributes, Conservatives in 2019 are more positive about Mrs Truss than two weeks ago and more negative about Sunak.
A third of all voters (34%) think the government should keep taxes and spending on public services where they are now, while 26% think both should be increased.
Image: Rishi Sunak meets Island Conservatives on the Isle of Wight
Frontrunner denies video leak
Ms Truss has refused to say whether her campaign was involved in the leaking of a video in which Sunak spoke of working to divert funding from disadvantaged urban areas to more prosperous cities.
The Tory leadership candidate was asked during a visit to the West Midlands if her team had anything to do with the leaking of her rival’s controversial comments.
She told reporters: “I am running a positive campaign.
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0:25 Sunak took money from poor areas
“My campaign is about how we unlock Britain’s potential, how we get the economy going in these difficult times, how we get investment in great places like the West Midlands.”
Speaking in Southampton after a visit to the Isle of Wight on Saturday, Sunak said he was “standing[s] by absolutely” what he said, citing the island as an example of a community he feels is not getting the support it needs from the funding formula.