Here’s How Rishi, Liz Plan to Tackle Inflation, Cost-of-Living Crisis if Elected

Last Updated: September 05, 2022, 12:30 IST

Be it Rishi Sunak or Liz Truss, whosoever is elected as the next UK PM will face daunting challenges related mostly to the economy as well as regarding energy (Image: Reuters)

The new UK prime minister has to tackle inflation which is in double-digits, an economy recovering from Covid and the conflict in Ukraine

The UK will find out who their next prime minister is going to be on Monday evening. The contest was closely fought between foreign secretary Liz Truss and former chancellor to the exchequer Rishi Sunak. All Conservative Party members have cast their ballots and the results will be announced at 12:30pm (BST).

The voters for the elections for the UK prime minister and the Conservative party leader will be Conservative Party members but not the general public. The need for this leadership contest was precipitated by the downfall of outgoing prime minister Boris Johnson.

Johnson enraged the Conservative Party members by organising parties during the Covid lockdown also known as the Partygate scandal. It was also Rishi Sunak and health secretary Sajid Javid whose resignations further accelerated the exit of Johnson.

Johnson, however, is leaving at a time when the UK is caught in between rising food and energy prices and a cost-of-living crisis. The UK economy is also recovering from the losses inflicted by the pandemic. Inflation in the UK is in double-digit figures at 10.1%.

Here’s how Rishi Sunak and Liz Truss plan to revive the UK economy:

  • Tax Cuts – Liz Truss has promised not to introduce any new taxes. She said that she will also scrap a planned rise in corporation tax which was expected in 2023. Meanwhile, Rishi Sunak said taxes will only be lowered once he has a ‘firm grip’ on inflation. Sunak, however, promised to cut the basic rate of income tax by 1% in April 2024 and 3% by the time the UK parliament convenes for its next session. He also promised to scrap a 5% VAT rate on household energy for one year in case the price cap on bills rise above £3,000, according to the BBC. Truss said she would reverse the recent rise in National Insurance while Sunak raised it when he was chancellor to by 1.25% while raising the earning level
  • Cost-of-living crisis – Truss promised to hold an emergency budget to address the economic challenges and the inflation. Truss said her reversal of the National Insurance rise would ensure more money back into people’s pockets. Truss ruled out energy rationing this winter and said she will provide more support for households and businesses with respect to energy costs. Liz Truss said she will not revisit the idea of a windfall tax unlike Rishi Sunak who promised to use the windfall tax to support pensioners, low-income households and those with disabilities. Sunak also promised a £400 grant for energy bills in addition to £150 council tax rebate. Truss said she will discuss the issue of monetary supply and will urge the Bank of England to do more with respect to inflation.

(with inputs from the BBC)

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