Redistributive policy

Rishi Sunak backs Rwanda’s asylum policy, calls ‘common sense’ Thatcherite – live

Hello. Liz Trussthe Foreign Secretary, is now the favorite in the contest to be the next Conservative leader and Prime Minister and she has just given her first real campaign broadcast interview, to Nick Robinson on the Today programme.

The main divide between Truss and Rishi Sunak, the former chancellor and the only other remaining candidate in the Tory leadership race, is that Truss is now demanding huge immediate tax cuts. She says they are needed to revive the economy and avoid recession. Sunak says tax cuts would now be inflationary and should only be implemented when affordable.

What was interesting about Truss’ interview was that she doubled down on her argument, saying her approach was necessary because the economic orthodoxy accepted by governments of both parties over the past 20 years was wrong. She told Robinson:

The thing is, we’ve had economic policy – not just under this government, over the last two decades – there’s been consensus on our economic policy, and it hasn’t generated economic growth…

We’ve had a consensus of Treasury, economists, Financial Times, other media, peddling a particular type of economic policy over the last 20 years. And it didn’t generate growth…

What I know of the Treasury from having worked there is that it has an economic orthodoxy and is resistant to change. And what people in Britain desperately need now is change.

Truss accepted that his tax cut plans would cost around £38billion a year. But she said they were affordable under the government’s current budget rules and, when Robinson challenged her to name a single economist who didn’t think the tax cuts would now be inflationary, she snapped. quoted one, Patrick Minford. She said she was okay with Minford’s Argumentwhich is that tax cuts would be good for the supply side of the economy (people would have more incentive to work or start a business), and that it would reduce inflation.

In his attack on Treasury thinking, Truss mirrored what Boris Johnson told MPs yesterday as he ended PMQs with advice for his successor.

But she also seems to follow another economic thinker less popular in conservative circles. Robinson told her that if she favored a big increase in borrowing to revive the economy, she should have voted for Jeremy Corbyn. Truss did not address his point directly, but last night John McDonnel, Corbyn’s shadow chancellor, suggested he agreed with the analysis. He told ITV’s Peston show:

I was then told that this idea of ​​borrowing to grow the economy and then letting it finance itself is absurd… What did we just hear? [from the Tory leadership contest is] borrow to grow the economy.

It’s extraordinary that they’re repeating my program but at the same time they’re doing it in a way that, to be frank, I think has nothing to do with the real world we live in, which is the immediate crisis of cost of living and climate change.

There was a lot more in Truss’ interview today. I will post a full summary shortly.

Here is the program for the day.

9:30 a.m.: The Office for National Statistics releases the latest crime figures for England and Wales.

Morning: Liz Truss and Rishi Sunak organize a private election campaign with conservative advisers from the Local Government Association.

11:30 a.m.: Downing Street holds a lobby briefing.

Afternoon: Truss is expected to hold a campaign event outside London.

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