Conservative lead candidate Rishi Sunak has accused former cabinet mates of taking a “rosy” look at the final days of Boris Johnson’s government as he defended his plans to cut income taxes.
The former Chancellor is struggling to regain ground on rival Liz Truss as the pair enter a pivotal week in the leadership competition. The 160,000 Conservative members will receive their ballots this week, with some able to cast their ballots from Monday as the two prepare for their second Husting event on Monday night in Exeter.
On Monday morning Chancellor Nadhim Zahawi became the latest senior minister to back Mr Truss, after Defense Secretary Ben Wallace last week and former Northern Ireland Minister Brandon Lewis on Sunday.
With early polls of Conservative members putting Ms Truss comfortably ahead, some commentators have dismissed Mr Sunak’s decision to leave Mr Johnson’s cabinet amid concerns over “a very serious ethical issue” and a disagreement over economic policies that would see the prime minister’s ouster triggered in the past month, blamed.
But speaking to BBC Radio 4’s Today programme, Mr Sunak said: “I think there is a risk that people will look at the last few months of government with slightly rose-colored glasses for how it really was, because that’s how it was. The government was not functioning as it should, and crucially, it was on the wrong side of a very serious ethical issue.
“For me, going the wrong way, also economically. That is why, in the end, I think more than 60 MPs resigned from the government, of which I was one of them, after much deliberation and after months of standing next to the Prime Minister.
“If people want to have rose-colored glasses on what’s going on in government, that’s up to them, but they have to acknowledge it.”
In a last-ditch effort to win over supporters ahead of the election, Mr Sunak sought to shake off his image as a tax-driving former chancellor by promising the “biggest income tax cut since Margaret Thatcher’s government”.
He pledged to cut the property tax rate from 20 percent to 16 percent within seven years when he becomes prime minister, a move immediately branded a “flip-flop” by allies of Ms Truss after she announced plans for sweeping taxation for weeks had characterized cuts as “comforting fairy tales”.
Mr Sunak’s plan builds on his previously announced 1p income tax cut in April 2024, with the extra 3p to be cut depending on economic growth to finance it, a move that could cost up to £19billion.
The former Chancellor denied he would implement another tax turn – less than a week after announcing he would introduce a temporary VAT cut on energy bills to ease the cost of living crisis, a move his Critics said while he fought back he ran the Treasury Department.
Asked if the tax cut plan was an attempt to push Ms Truss back, he told the BBC: “No, definitely not. This is perfectly consistent with what I have been saying for a long time.
“That is why, as Chancellor, I have already presented a plan to reduce income tax in this Parliament. As Federal Chancellor, I announced the first groschen basic tariff in almost 15 years. But what I’m talking about today is my desire to move beyond that with the times, and people should know that I want to get the economy there.”
He also dismissed a slap from Mr Zahawi, who wrote in the Telegraph that Ms Truss would overturn a “stale economic orthodoxy” at the Treasury and “run our economy in a conservative manner.
“I was on the side of turning it down [the orthodoxy] in the pandemic,” he said. “What people saw of me was that I tore up the rule book, I did something that has never been done in this country before and created the furlough scheme. There was absolutely no orthodoxy about it. It worked. It has saved millions of jobs and I am proud that I did it.
“And indeed, when it comes to corporate taxation, as you said, it’s my opponent in this contest who wants to cling to the failed orthodoxy of those ultra-low corporate tax rates.”
In another dig at his opponent, who has vowed to delay a steep rise in corporate tax from next year if she wins the race to Downing Street and scrap the Social Security hike, Mr Sunak said: “I don’t believe it would be wise to embark on a spate of excessive borrowing at a time when inflation and interest rates are already rising. I think everyone understands that this is a differentiator between us, but we also have to look beyond that. And so I want to give people a sense of where I want the economy to go once we get inflation under control.”
But Finance Minister Simon Clarke, who supports Ms Truss, rounded out Mr Sunak’s tax plans, saying: “Liz will cut taxes in seven weeks, not seven years.”
A Truss campaign source added: “It’s just a shame he didn’t do this as chancellor when he repeatedly hiked taxes.
“He’s also made it conditional on getting growth first – knowing full well that his corporate tax hikes are contractionary.
“The public and Conservative Party members can see through these flip-flops and about-faces.”