Economic policy

Sunak and Truss clash over UK economic policy in debate

LONDON

British Conservative Party leadership candidates Rishi Sunak and Liz Truss took part in a debate on Friday where they again clashed over economic policy.

The Bank of England on Thursday predicted inflation would hit over 13% and the UK faces a recession that will last more than a year.

Truss said the UK should not go into a recession because “forecasts are not fate”.

“Basically, what we need to do is show people that there is hope and an optimistic future ahead of us. And like I said, we’re brilliant at start-ups, but we need to be better at financing scale-ups, so one of the things I would do would be to unleash more investment in our economy, reforming solvency as well,” she said.

Truss added: “We can create Britain’s version of Silicon Valley, we can create real opportunity. We have a generation of talented young people ready to seize these opportunities, but we need to achieve growth.

Sunak said that unless inflation is brought under control, “we can say goodbye to winning the next election.”

He criticized Truss’s tax cut promises because he said he was “worried about policies that risk making (inflation) worse and lasting longer.”

“It’s a problem that’s not just for this winter. This is a problem for next winter as well, and beyond,” Sunak said. “Because, as the Bank of England has said, they fear inflation is setting in, so there’s no hope that we’ll win the next election. Absolutely none. It’s as simple as that.”

The two also clashed over corporation tax. While he was chancellor, Sunak announced a raise from 19% to 25%. Truss wants to reverse it.

Sunak said it was the wrong tax to focus on because previous corporate tax cuts had not increased investment in the economy. Instead, he wants to reform corporate taxation.

Members of the Conservative Party will vote to nominate their next leader who will also become the next prime minister.

Truss leads in internal polls of Conservative Party members by some margin, although Sunak led the first leg of the contest with Conservative Party MPs.

The new leader of the Conservative Party, and in turn prime minister, will be announced on September 5.

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