Rishi Sunak should cut taxes, senior Tory says, after Liz Truss blames ‘economic establishment’ for failure

Rishi Sunak should prioritise cutting taxes and revive the “optimism” of Boris Johnson because Liz Truss is right in her diagnosis of the low growth “disease” afflicting the UK, a former Conservative chairman has said.

Ex-Cabinet minister Sir Jake Berry urged the Prime Minister to “unite the Conservative Party” behind an optimistic “low, tax high growth” vision while acknowledging Mr Sunak was right to prioritise growth and tackling inflation in his five pledges to voters.

It came after Ms Truss blamed a “powerful economic establishment” characterised by a “left-wards” drift in economic thinking for her disastrous 49 day stint as prime minister, in which her radical tax-cutting mini-Budget unravelled and caused chaos on financial markets.

Her comments risk adding to the pressure on Mr Sunak to drop his opposition to cutting taxes in next month’s Budget.

Chancellor Jeremy Hunt this week clashed with Tory MPs who want tax cuts to help stave off dire forecasts of a looming recession. Mr Hunt insisted giveaways will have to wait until inflation is brought under control.

Commenting on Ms Truss’s 4,000-word essay in the Sunday Telegraph, Sir Jake told BBC One’s Sunday With Laura Kuenssberg: “I still agree with Liz’s diagnosis of the disease that is facing the country and I think she accepts in this story that the prescription that we wrote – which I have to take part of the blame – wasn’t delivered in the correct way.

“But I think her point of: we need to lower taxes, we need to create a growing economy, that’s what people want.”

Sir Jake suggested Mr Johnson, Ms Truss’s predecessor as prime minister, had the right approach that could help unite a Tory Party divided over economic policy, despite taxes rising to their highest level in decades under his leadership.

“He was famous for his boosterism and that led to the greatest general election victory for the Conservative Party this century.

“It is popular with the public, to be optimistic to talk about the future of their families, to make sure that they keep more of their money in the first place.

“And actually, Rishi Sunak in his five ambitions that he set out partially set some of that out – saying I’m going to create growth, I’m going to tackle inflation, that creeping stealth tax on every family in this country.

“I think, you know, if we can get back to those optimistic ways that will unite the Conservative Party behind that low-tax, high growth.”

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Tory MP Richard Graham, who is one of the Prime Minister’s trade envoys, said Ms Truss’s article would stir up painful memories for voters.

He told Times Radio: “I think it’s probably a mistake, really, to try and make the case that the Liz Truss government had the right ideas at this stage.

“I think it probably undermines the credibility of the Sunday Telegraph more than anything else, because of course, they were a huge backer of some of the ideas that she came forward with.

“And I think, for most people in the country, that was a period that they would rather, not really remember too clearly. And let’s get on with sorting out the problems in people’s day to day lives.”

Mr Graham also backed the Government in its refusal to countenance tax cuts in the near future.

“I think everybody understands that this is a very difficult time to do tax cuts. And we have to look for other levers that the Chancellor has, in order to generate that sort of enthusiasm for a low tax economy that we want to see.

“So that you know, that’s going to take a little bit of time to come through”

Meanwhile Business Secretary Grant Shapps said Ms Truss’s mistake was to push ahead with tax cuts before bringing inflation under control, while insisting he “completely” agrees with her “instinct”.

He told Sky News’s Sophy Ridge on Sunday programme: “You have got to deal with the fundamentals first. You have got to reduce inflation which is the biggest tax cut anybody can have.

“I notice she said they hadn’t prepared the ground for these big tax changes. What you have got to do is deal with the big structural issues first, deal with inflation first, deal with debt, and then you look towards tax cuts.

“I completely agree with Liz’s instinct to have a lower tax economy. We also know that if you do that before you’ve dealt with inflation and dealt with the debt then you end up in difficulty. You can’t get the growth out of nowhere.

“Rishi Sunak has come in, he has removed that premium because the markets didn’t like what was going on back then. So we are back to where we should be.”