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Sunak and Truss slug it out over tax rises and cuts

THE two Tory candidates fighting to be the next prime minister have come to blows over their finance plans.

The differences between Rishi Sunak and Liz Truss continued to grow as the two battled for the votes of the Tory membership, who will decide the winner.

In an interview on Thursday evening, former chancellor Mr Sunak warned against a “huge borrowing spree” and claimed the Tories would suffer a defeat at the next general election under the leadership of his rival Ms Truss.

Mr Sunak said he thought borrowing £30 billion for unfunded tax cuts would be “inflationary,” adding that going on a “huge borrowing spree” would only “make the situation worse.”

Asked if the Tories would likely be defeated in the next election if Ms Truss became leader, Mr Sunak told Tonight with Andrew Marr on LBC: “That’s what all the evidence that we have today would show, and that’s what our members will need to consider.”

Earlier, during a visit to Peterborough, Ms Truss defended her tax cut plans: “What is not affordable is putting up taxes, choking off growth, and ending up in a much worse position.”

Mr Sunak has said he will not cut personal taxes until at least autumn next year to avoid fuelling inflation, while Ms Truss promised an emergency budget to immediately cut taxes.

Robert Joyce, deputy director of the Institute for Fiscal Studies think tank, put Ms Truss’s tax cuts at “more than £30bn per year.”

The plans “mean higher borrowing or less public spending, or some combination”, he said.

“Without spending reductions, the tax promises would likely lead to the current fiscal rules being broken, and Ms Truss has hinted that the fiscal rules may change,” Mr Joyce added.

Ms Truss insisted on Thursday that she was not planning  to cut public spending.

She said she was planning “public service reforms to get more money to the front line, to cut out a lot of the bureaucracy that people face.”

Ms Truss has also vowed last night to review all EU laws retained after Brexit by the end of next year and to scrap or replace those that are deemed to hinder UK growth.

She said that, if elected, she would set a “sunset” deadline for every piece of EU-derived business regulation and assess whether it stimulates domestic growth or investment by the end of 2023.

The BBC will air a debate between the two candidates on Monday July 25. 

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