UK Conservative Party leadership candidates Rishi Sunak and Liz Truss took part in a debate Friday where they again clashed over economic policy.
The Bank of England predicted Thursday that inflation will reach more than 13% and that the UK was facing a recession that would last longer than a year.
Truss said the UK must not talk itself into a recession because “forecasts are not destiny.”
“Fundamentally, what we need to do is we need to show people that there is hope, and there is an optimistic future ahead of us. And as I’ve said, we’re brilliant at start-ups, but we need to be better at funding the scale-ups. So one of the things I would do is unleash more investment into our economy, through reforming solvency too,” she said.
Truss added: “We can create the British version of Silicon Valley, we can create real opportunities. We have a talented generation of young people ready to take those opportunities on, but we need to get the growth.”
Sunak said unless inflation was brought under control, “we can kiss goodbye to winning that next election.”
He criticized Truss’ tax cut pledges because he said he was “worried about policies that risk making it (inflation) worse and last longer.”
“This is a problem that isn’t just for this winter. It’s a problem for next winter as well, and beyond,” said Sunak. “Because as the Bank of England said, they are worried about inflation becoming embedded, then there’s no hope that we’re going to win that next election. Absolutely none. It’s as simple as that.”
The two also clashed over the corporation tax. While he was chancellor, Sunak announced an increase from 19% to 25%. Truss wants to reverse it.
Sunak said it was the wrong tax to focus on because the previous cuts to the corporation tax did not increase investment in the economy. Instead, he wants to reform business taxes.
The Conservative Party members will vote to decide on their next leader who will also become the next prime minister.
Truss is leading in internal Conservative Party membership polls by some margin, although Sunak led in the first stage of the contest with Conservative Party MPs.
The new leader of the Conservative Party, and in turn prime minister, will be announced Sept. 5.
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