A former Conservative Party leader has criticized Rishi Sunak’s economic approach, accusing the former chancellor of stoking inflation.
Speaking to Sky News’ Sophy Ridge on Sunday, Liz Truss’ funder Sir Iain Duncan Smith said the Treasury, overseen by Mr Sunakdemonstrated a “failure” of monetary policy.
Sir Iain continued: ‘There is a real debate to be had here in the party about this because I think the Government and the Treasury, by a particular orthodoxy, are bound down the wrong path which could seriously harm us over the course of of the next two years.”
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He added: “We have an inflationary spiral going on, now we have the war in Ukraineit’s even worse when it comes to energy, but here in the UK we have to bear some of the blame for the fact that inflation is rising on top of all that.
“And that’s because of the failure of the Bank of England and the Treasury on, I think, monetary policy.
“First, over a year ago the Bank actually continued to print huge amounts of money, which inflated the economy while keeping interest rates low.
“It was the Treasury who approved this money printing, the Chancellor no less, so before they say ‘oh it’s independent’, the Treasury has a right to say no to the money printing and they didn’t – it fueled inflation.”
Sir Iain said Foreign Secretary Ms Truss’ record in government was ‘strong’ when asked about her tax proposals.
Ms Truss pledged to drop the corporate tax hike and suspend the green levy in the first campaign roundups on Friday.
But, apparently in a dig at the Foreign Secretary, Deputy Prime Minister Dominic Raab said Tory leadership candidates calling for tax cuts had to explain how they would be paid.
Mr Raab, who supports Mr Sunak, told Sky News’ Sophy Ridge On Sunday: ‘You can’t borrow to get out of an inflation crisis.
“If people are suggesting that we should make cuts to the NHS at a time not just of COVID, but of all the other non-COVID NHS challenges, they need to clarify where they are coming from.
“We all want to leave people with more money in their pockets. But if you cut taxes and inflation robs people of that money because it’s worthless or sees interest rates go up and so their mortgage is more expensive, so frankly it’s a false economy.”
The comments came hours after the former chancellor and now Tory leadership hopeful pledged to scrap hundreds of remaining EU laws and regulations if he wins the contest.
In a new pitch to woo Brexiteers, the former chancellor promised to appoint a Brexit Minister to comb through the remaining 2,400 EU laws still on the UK law book.
He even promised a “Big Bang 2.0” for the City through an overhaul of the latest European financial services regulations.
It comes as the last five leadership candidates prepare to face off again in the second televised debate on ITV on Sunday night.
In a statement outlining his proposals, Mr Sunak stressed he had always supported Brexit, despite being warned it could damage his political career as it was the ‘right thing’ for the country .
Mr Sunak dominated the first two rounds of MP voting but still falls short of the 120 votes he needs to guarantee him a place in the final two.
A new poll of Conservative Party members by ConservativeHome has Kemi Badenoch in the lead with 31% of respondents, with a dominant leader in second place Liz Truss on 20%.
Next is Penny Mordaunt on 18%, who dropped from the top spot, followed by Mr Sunak and Tom Tugendhat.
Far from the leadership race, Minister Alok Sharma threatened to resign if the next prime minister does not commit to a strong net zero agenda.
Mr Sharma, who led the historic UN climate summit Cop26 last year, told The Observer that while it was “absolutely a matter of leadership”, some of the remaining candidates in the Conservative leadership race had only been “lukewarm”.
(c) Sky News 2022: Former Tory leader criticizes Rishi Sunak’s economy