Tory leadership race: what did Rishi Sunak and Liz Truss say about cost of living at Cheltenham hustings?

Rishi Sunak warned voters at the Cheltenham hustings event that Liz Truss’ cost of living plans could put vulnerable people at risk of “real destitution”.

The Tory leadership hopefuls once again clashed over economic policy, with the former chancellor insisting that pensioners and people on low incomes would need further direct payments in the coming months.

His comments come as the Trades Union Congress (TUC) said energy bills could top £5,000 next year, in the most dire prediction yet.

The Foreign Secretary however stood by her plans to cut taxes as a way to ease the burden of rising costs, warning against what she referred to as “Gordon Brown economics.”

So what exactly did the two Tory MPs say at the Cheltenham hustings event, and where did they disagree?

What did Liz Truss say?

When asked whether she was for or against “handouts”, Ms Truss refused to rule out further help - but stressed that her “first preference” had always been to reduce taxes.

She warned against “taking money off people in taxes and giving it back in benefits,” arguing that an increase in taxes would prevent economic growth and send the country to “penury”.

The South West Norfolk MP wants to reverse the national insurance hike and planned increase to corporation tax, both of which were introduced by Mr Sunak when he was Chancellor.

She said that her tax cuts, which will cost £30 billion, are “affordable within our current budget” - but that her opponent’s plans to raise taxes will “likely lead to a recession”.

On the issue of the billions of pounds of profits being made by energy companies amidst the cost of living crisis, Ms Truss said she would ensure that those in oligopoly were held to account.

However, she added that she would “absolutely” not support a windfall tax, which would see a one-off levy imposed on energy giants profiting from skyrocketing bills, referring to it as a “Labour [Party]” idea.

She also insisted that profit is not a “dirty word”, claiming it “bash[es] business” and sends the wrong message to international investors and the public.

In another exchange, Ms Truss resisted comparisons to former Conservative prime minister Margaret Thatcher.

She said: “Don’t get me wrong, I’m a massive fan of Mrs Thatcher - but we live in different times.

“I’m my own person.”

What did Rishi Sunak say?

Mr Sunak admitted that the Government will need to offer more help than he previously thought in order to prevent vulnerable people from facing serious hardship.

He warned that the country will “never forgive us” if the Conservatives do not provide direct support to pensioners and people on low incomes.”

The former chancellor said: “Liz’s tax plan is not going to help those groups of people.

“Scrapping the health and social care levy, as she wants to do, is worth £1,700 to her on her salary.

“For someone working really hard on the national living wage, it’s worth just over £1 a week, and for someone who’s a pensioner, without any earnings, it’s worth zero.”

He added that he wanted to provide direct support to these groups of people, arguing it would be a “moral failure” not to do so.

The Richmond MP then addressed those who are supporting his rival.

“If you support a plan that Liz is suggesting,” he commented, “which says she doesn’t believe in providing direct financial support to those groups of people… We are going to, as a Conservative Government, leave millions of incredibly vulnerable people at the risk of real destitution.”

When asked about the prospect of Ms Truss scrapping the Bank of England’s independence, Mr Sunak said it made him “very nervous”.

He argued that it would be a mistake for the country, and that international investors “would not look very highly on it at all.”

What happens next?

The leadership candidates will appear at their next hustings event in Perth, Scotland, on 16 August as they continue their bids to replace Boris Johnson as Prime Minister.

It is likely that the cost of living crisis will remain the primary topic of debate, as soaring bills and record high levels of inflation continue to take hold of the UK’s population.

Tory party members can already vote for their favourite candidate - but the voting remains open until 2 September, after all of the hustings events have taken place.

The winner, and therefore the UK’s next Prime Minister, will be announced on 5 September.