Liz Truss rules out new taxes, energy rationing in final UK pitch to win PM post

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Liz Truss ruled out introducing any new taxes or rationing of energy this winter if she becomes UK’s next prime minister, two eye-catching pledges in her final pitch to win the post.

Truss, who is the bookmakers’ favorite to succeed Boris Johnson, made the commitments at the last Conservative Party leadership hustings in London on Wednesday, ahead of the victor being announced September 5.

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Truss was asked if she’d make a “read my lips promise not to raise taxes in government,” to which she said: “Yes. No new taxes.” She specifically ruled out introducing any new windfall taxes on the energy sector.

Conservative leadership candidates Liz Truss and Rishi Sunak stand together as they attend a hustings event, part of the Conservative party leadership campaign, in London, Britain,  on August 31, 2022. (Reuters)
Conservative leadership candidates Liz Truss and Rishi Sunak stand together as they attend a hustings event, part of the Conservative party leadership campaign, in London, Britain, on August 31, 2022. (Reuters)

Should she win the race for 10 Downing Street, Truss will have to confront a looming economic crisis in Britain, with households facing a record squeeze on living standards amid a surge in energy costs. Truss is planning an emergency mini-budget within her first month in office but is yet to detail an extensive plan for how she would d ease the cost-of-living pain.

Economic reality

Her opposition to a further windfall tax on extraordinary profits linked to high gas prices caused by Russia’s war in Ukraine may come under pressure in the coming months. The UK Treasury forecasts as much as £170 billion of profit for gas producers and electricity generators over the next two years, according to estimates seen by Bloomberg.

Johnson’s Tories introduced an initial 25 percent levy on the profits of oil and gas firms in May after months of pressure from the opposition Labour Party.

Labour is arguing for a freeze on energy bills in the UK this winter, funded by an expanded windfall tax. Without new taxes, Truss will need to lean on extra government borrowing or cuts to spending elsewhere to finance further household support.

And even as the British government works on contingency planning to secure energy supplies for the winter -- under a worst-case scenario officials predict blackouts -- Truss ruled out the prospect of needing to ration energy, without giving further details.

Her leadership rival, Rishi Sunak, said nothing could be ruled out. “Many European countries are looking at how we can all optimize our energy usage,” Sunak said at the hustings at Wembley Arena in London. “That is a sensible thing for us to be doing as a country.”

The winner of the Conservative Party leadership race will be announced at 12:30 p.m. on Monday and they will formally become prime minister after seeing the Queen on Tuesday.

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