Rishi Sunak says Liz Truss’s plans for £30billion of tax cuts will ‘put fuel on the fire’ of inflation and ‘erode people’s living standards’

During a live interview with Channel 4’s Andrew Neil on Friday night, on which rival candidate Liz Truss did not appear, the former Chancellor was grilled about his decision to raise taxes and freeze income tax thresholds in the wake of the pandemic.

The final two candidates have clashed over how to tackle the cost of living crisis and inflation – with Mr Sunak backing his choice to raise taxes while Ms Truss vows to slash them.

Mr Sunak told Andrew Neil tackling the debt racked up from Covid is not about going on a “borrowing spree” or passing the bills onto the next generation.

“I think it is absolutely the right thing to do not to put fuel on the fire of the recession we already have,” he said.

He pointed to his long-term growth plan for the economy, including reforming business taxation, “so companies innovate more”, deregulation and creating free ports.

When pushed by Andrew Neil on whether that plan would take too long, Mr Sunak said: “What we should do is focus on long term growth…not a sugar rush boom that will make us feel better for months.”

He also defended his decision to freeze income tax thresholds, saying it was hailed as “progressive” by independent economists at the time and promised as prime minister, he would introduce the highest income tax cuts “in 16 years”.

When asked why she did not appear on Channel 4, Foreign Secretary Liz Truss told reporters that she was celebrating her 22nd wedding anniversary.

She has accused Mr Sunak of “scaremongering” after he attacked her economic plan, saying it would lead to interest rates of 7 per cent and shift the cost onto the next generation.

Ms Truss has said Mr Sunak’s economic plan would lead Britain to a recession and the country would become uncompetitive internationally.

“What I’m talking about is unleashing opportunity, unleashing growth, keeping taxes low. That will see the economy grow, and it will see us being able to pay back our debt quicker,” she said from Norfolk on Friday.

Mr Sunak, a son of migrants, told Andrew Neil on Friday that “there is a finite amount of asylum seekers we can integrate”.

He said if elected prime minister, it would be his “priority” to get Boris Johnson’s controversial Rwanda pilot “up and running”.

The pilot, which was blocked by the High Court at the 11th hour, would see 200 migrants attempting to settle in the UK be flown to Rwanda.

The African nation had originally agreed to take up to 1,000 migrants from the UK in a trial deal worth £120 million, but now it only has the capacity to take 200.

Plans are in place to house 100 migrants in the £58 a night Hope Hostel – which would cost the British taxpayer up to £5,800 a night – while several other locations are being looked at for another 100 migrants.

When pressed on the cost of the pilot, Mr Sunak told Andrew Neil that it currently costs £5 million a day to house people in hotels in the UK.

He claimed once the pilot was up and running and serving as a “strong deterrent” then there wouldn’t be “tens of thousands” of asylum seekers attempting to settle in the UK.

“My priority is to make that policy work…if it means tens of thousands are not coming here, then we will save.

“Because there is a finite amount of asylum seekers we can integrate.”

He said: “We clearly have a problem with human rights law in this country” and said it is right for the asylum seeker and migration process to be “controlled”.

Mr Sunak supported government plans to pass a British Bill of Rights to replace the Human Rights Act to make it easier to deport foreign nationals.

He and Liz Truss have been taking part in TV debates and hustings across the country this week in a bid to win the most support from Tory members.

Mr Sunak admitted “the polls say I’m behind in this race” but he stressed that he was going to “fight for every vote”.

Mr Sunak this week also pledged to crack down on sexual violence with £192 million a year in funding. He wrote in the Daily Mail that the funding would go towards victim support, including 1,000 independent sexual violence advisers and 24/7 support for rape victims.

But he was dealt a blow when Defence Secretary Ben Wallace announced he would back Liz Truss and questioned Mr Sunak’s experience for the top job.

Meanwhile Liz Truss, when asked during a visit to Norfolk on Friday if she was confident she was now set to win the leadership contest, said: “I’m not at all complacent. I’m fighting for every vote across the country.”

The final two candidates will take part in a Sky News televised debate on August 4. On September 5 a new leader and prime minister will be chosen.

Tory party members will receive their postal ballots early next week.