Rishi Sunak has defended his U-turn this week when he promised to cut VAT on energy bills in autumn, saying it was the only lever available to government that would have an immediate impact. In an interview with Andrew Neil on Channel 4, Mr Sunak said the cut was a blunt instrument and stood by his statement a few months ago that it would disproportionately benefit high earners.
“I announced support to help but now the situation is worse, and I’d like to do more. This is the easiest lever that government can pull. It’s not perfect — I’m not going to pretend that it is perfect — but at this point if I became prime minister in September, you have weeks to put in place help. This is the only lever,” he said.
Mr Sunak is trailing far behind foreign secretary Liz Truss in the contest to succeed Boris Johnson as Conservative leader and prime minister. Ms Truss did not agree to be quizzed by Mr Neil.
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Mr Sunak defended his wife’s handling of her tax affairs after it was revealed that she enjoyed non-dom status that allowed her to pay British tax only on her British income.
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“These things, as I discovered and learned myself, are difficult when it comes to your family but I’ve learned from that experience,” he said. “I’m confident that that experience has actually made me better-suited to now lead.”
Stoking fear
Earlier, Ms Truss accused Mr Sunak of stoking fear by warning that her debt-funded tax cuts could fuel inflation and drive interest rates up to 7 per cent, as her economic adviser Patrick Minford suggested last week.
“Frankly, this is just scaremongering. Inflation is predicted to come down next year. And the Bank of England is independent, it makes decisions about interest rates completely independently of the government,” she told the Conservative Home website.
Ms Truss won the endorsement of defence secretary Ben Wallace, one of the most popular ministers in the government and a figure who was himself tipped as a likely successor to Mr Johnson. He said he knew both candidates well but he wanted to see how they fared in debates and hustings before choosing who to support.
“I thought what I would do at the beginning of this contest is stand back. I am the secretary of state for defence — I want to find a candidate that is going to do right by the department and recognise that the threats we face everyday are very real and are growing and that they need to be funded properly,” he told Sky News.
“I know Liz. She is very straight, she is authentic, what you see is what you get, but also she has been very consistent in her support for defence and security. She reads the same intelligence reports I do, so I felt it was the right person to back.”
Mr Wallace criticised Mr Sunak for resigning when the 1922 Committee was likely to give MPs an opportunity to vote no confidence in Mr Johnson a few days later. “Some ministers don’t have the luxury of resigning because fundamentally we have duties and obligations,” he said.
