Conservative Party MP Sajid Javid on Wednesday, 3 August, supported prime ministerial candidate Liz Truss as the next leader of the United Kingdom. His endorsement comes as a blow to Truss' contender Rishi Sunak, who was once considered to be one of the close allies of Javid, reported The Guardian.
Warning against Sunak's economic plans, Javid said that it would mean “sleepwalking into a high-tax, low-growth" situation. Meanwhile, in her campaign, Truss has endorsed 'immediate tax cuts' if voted to power.
"After careful consideration, it is clear to me that Liz Truss is best placed to pass these tests," Javid wrote in an article for The Times.
"The circumstances we are in require a new approach. Over the long term, we are more likely to be fiscally sustainable by improving trend growth," he added.
"Some claim that tax cuts can only come once we have growth. I believe the exact opposite – tax cuts are a prerequisite for growth,” he said, attacking Sunak's plans.
Javid and Sunak worked together in the UK's treasury department and resigned on the same day, which led to the resignations of many other ministers, consequently causing the downfall of Boris Johnson as the prime minister of the UK.
Sunak on 'Immediate Tax Cuts'
Sunak on Wednesday warned against immediate tax cuts, saying that his number one priority would be 'gripping inflation,' the report added.
“If we rush through premature tax cuts before we have gripped inflation, all we are doing is giving with one hand and then taking away with the other,” Sunak said.
“That would stoke inflation and drive up interest rates, adding to people’s mortgage payments. And it would mean every pound people get back in their pockets is nothing more than a down payment on rising prices," he added.
Meanwhile, Truss supported the plan to cut taxes, saying that it provides "immediate help" to the people.
“We cannot tax our way to growth. My economic plan will get our economy moving by reforming the supply side, getting EU regulation off our statute books, and cutting taxes," she said.
“Modest tax cuts – including scrapping a potentially ruinous corporation tax rise that hasn’t even come into force – are not inflationary," she added.
(With inputs from The Guardian and The Times.)
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