Rishi’s mauled over tax record
In a bruising TV encounter, he denies his policies will hit economy
RISHI Sunak was last night forced to deny his economic plans would trigger a recession as he was mauled over tax hikes he pushed through as chancellor.
The Tory leadership hopeful sought to pitch himself in a robust interview as the candidate with the experience to run the country with ‘compassion’.
But he was asked by Channel 4’s Andrew Neil why he persisted with ‘multi-billion pound tax rises this year’ when it was ‘already clear’ the UK economy was heading for a major slowdown.
Mr Sunak insisted it was right to pay bills ‘racked up during Covid’ rather than leave future generations to ‘pick up the tab’.
Mr Neil suggested the former chancellor was ensuring the economy grinds to a halt, to which Mr Sunak replied: ‘No, if you look at what’s happening around the world it’s inflation that is slowing economies down. It’s rising interest rates that are already putting a brake on economic activity.’
And Mr Sunak said his priority was to tackle inflation because it ‘erodes living standards’. When asked about warnings that he risked undermining growth, he said he had a ‘very clear plan’, including reforming business taxation, taking advantage of Brexit freedoms to cut red tape and create
‘I do want to cut taxes for people in work’
freeports. He was also accused of penalising workers rather than the affluent retired by raising national insurance and freezing income tax thresholds.
Mr Sunak insisted that his measures were fair because ‘freezing thresholds means that those with broader shoulders contribute the most’.
He added: ‘I do want to cut taxes for people in work, which is why under my plans we will deliver the first income tax cut in 16 years in this Parliament, that I paid for and put in my plan, because hard work is something that I want to reward.’
He was then put on the spot about his pledge to suspend VAT on energy bills, having in February rejected the policy. Mr Neil, a veteran broadcaster with a reputation as one of the most fearsome interrogators on British television, told him: ‘Not just bad judgment, it’s lack of consistency.’
Mr Sunak replied: ‘No, absolutely not. I’ve always said that as we knew more about what energy bills would actually be in the autumn, that I would stand ready to do more.’
He then admitted VAT was a ‘blunt instrument’ that disproportionately benefits the wealthy, but said it was the only measure left available to the Government as winter approaches. ‘It provides support to everybody and if you’ve got four weeks after becoming prime minister to put in place a policy that will help 30 million households, this is pretty much the only lever left.’
Mr Sunak also backed the Government’s Rwanda migrant policy, saying: ‘At any moment in time... there are probably a billion people that would love to move to the UK because this is an amazing country, so we can’t accept all of those.’
And he batted off criticism about his wife’s Akshata Murty’s former non-dom status, saying she was ‘following the rules that applied to her situation’.
Liz Truss declined an offer to be interviewed by Mr Neil.
Mr Sunak’s interview came as his leadership bid was dealt a setback. The BMG Research survey for the i newspaper placed him 11 points behind Miss Truss among people who voted Conservative at the last election – and 19 points behind those who voted for Brexit.
But the poll had the candidates level-pegging on 29 per cent among all voters when asked who would make the better prime minister.