Truss’s strategy of ‘classic Leftist borrowing and spending spree’ is ‘wrong thing to do’

Sunak backed by Hands as Energy Minister criticises Truss

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Energy Minister Greg Hands warned “the wrong thing to do at the moment would be to embark on a classic Leftist borrowing and spending spree”. Referring to Rishi Sunak’s economic plans which would not see the implementation of personal tax cuts until late next year if he becomes Prime Minister, he backed the former Chancellor and claimed the main priority for the country at the moment is “to get control of inflation and then to deliver growth and the tax cuts that we need”.

Mr Hands told BBC Newsnight: “I think the wrong thing to do at the moment would be to embark on a classic sort of Leftist borrowing and spending spree.

“The main priority at the moment is to get control of inflation.

“That means getting to grips with inflation at the moment.

“That is Rishi’s priority.

“And then to deliver growth and then to deliver the tax cuts that we need.

“I think there’s unity across the Conservative Party wanting to have tax cuts.

“The question is ‘how do you sequence it?’

“I think inflation must be brought under control.”

Referring to Liz Truss’s financial plans which would see a tax cut costing at least £30 billion a year, he added: “This idea that we will borrow more, we will spend more, [this] will create growth and somehow [this] will bring down inflation is likely the opposite effect.

“If you like, it is a classic sort of socialist view of running an economy”.

The comments came as opponent Rishi Sunak criticised Liz Truss’ financial strategy stressing that her tax cuts plans could fuel inflation and significantly increase interest rates as well as cost of mortgages.

Speaking at LBC yesterday, Sunak warned: “My strong point of view is if the government goes on a high borrowing spree, that is only going to make that situation worse. That will mean that the problem will last longer”.

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Referring to homeowners and mortgage rates, he added: “It’s going to push up their mortgage rates, if interest rates have to go up very hight to deal with that”. 

He also said: “Wouldn’t my life be easier if I just sat here and [said] ‘I’m going to do this lovely sounding thing and this lovely sounding thing’? But that wouldn’t be leadership.

“I think it would damage trust, because part of rebuilding trust is for the Government and politicians to deliver the things that they say. And sitting here and promising you a bunch of things that I don’t think are right or deliverable would be wrong”. 

Despite the criticism from her opponent, Truss defined her strategy as “affordable” and argued her tax cuts plan would not fuel inflation and, on the other side, would avoid recession.

Earlier in the day, she said: “What is not affordable is putting up taxes, choking off growth and ending up in a much worse position. Many international bodies, including the OECD, say that our current policy is contractionary, it’s likely to lead to a recession.

“I think the problem is that if we continue with our current economic policy, which is forecast to lead to a recession, it will be very hard for Conservatives to win an election”. 

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