Tory leadership: Liz Truss still favours tax cuts to ease economic crisis

Tory leadership candidate Liz Truss has insisted tax cuts were still the best way to ease the burden of soaring living costs.

Ms Truss and her rival Rishi Sunak are under pressure to outline how they would support people with rising bills.

When asked what she would do, Ms Truss said cutting taxes would let people "keep more of their own money".

The worsening UK economy has been central to the Tory leadership campaign.

Ms Truss and Mr Sunak, who are competing to be the next British prime minister, have clashed over their rival plans to deal with the economic fallout of skyrocketing energy prices.

The Bank of England has predicted inflation - how fast prices are rising - will hit 13% and the UK will plunge into a recession later this year.

And consultancy Cornwall Insight has warned that energy bills for a typical household could hit £4,266 next year.

On Monday Mr Sunak, who is trailing Ms Truss in the polls, vowed to provide more money to help people with their energy bills, if he becomes prime minister.

The foreign secretary has instead focused on her pledge to lower taxes, which she argues will help households by putting more money in their pockets and boosting economic growth.

But in recent days, Ms Truss has come under fire after she indicated there would be no more "handouts" if she became prime minister, despite the energy bills forecast.

Repeatedly pressed on whether she would provide direct support to households, Ms Truss told reporters: "What I don't believe in is taxing people to the highest level in 70 years, and then giving them their own money back."

"My fundamental principle is that people keep more of their own money."

Ms Truss said she would not comment on what was going to be in an emergency budget she has proposed, insisting she would wait to "see what the situation is like in the future".

Mr Sunak has argued Ms Truss's her tax cuts - worth an estimated £30bn - would stoke inflation and saddle the UK with debt.

The former chancellor's campaign said Ms Truss's latest commitment to tax cuts rather than direct support showed she was "divorced from reality".

"Liz Truss has doubled down, refusing five times to say she will provide direct support for British families and pensioners this winter," a Sunak campaign source said.

"Under her plans Liz will get £1,800 of support whilst hard working families will get as little as £60, while facing the same rises in bills.

"Liz's plan will not touch the sides for the majority of British families this winter and pensioners will get no help whatsoever."

Deputy Prime Minister Dominic Raab, a supporter of Mr Sunak, said unfunded tax cuts would push up inflation and could lead to people paying thousands more on their mortgages.

He said the Conservatives would be "punished" by voters under Ms Truss's plans for tax cuts.

His comments echo those made in a column for the Times in which he argued Ms Truss's emergency tax-cutting budget risked becoming an "electoral suicide note" for the Conservatives.

Responding to Mr Raab's remarks, Truss said: "I don't agree with these portents of doom.

"I don't agree with this declinist talk. I believe our country's best days are ahead of us.

"What I'm going to do if selected as prime minister is keep taxes low, get the economy growing, unleash the potential right across Britain. That's what I'm about."

Ms Truss and Mr Sunak are vying to win over Conservative Party members, whose votes will determine which of them will become the next Tory leader and prime minister.

The party's roughly 160,000 members started receiving ballot papers on Monday, with the result due on 5 September, when Prime Minister Boris Johnson will leave office.