Liz Truss may use ‘handouts’ to tackle cost of living crisis, ally suggests

“Handouts” may form part of Liz Truss’s plans for an emergency budget to ease the cost of living crisis, an ally of the Tory leadership frontrunner suggested on Monday.

Brandon Lewis, the former Northern Ireland secretary, insisted that the Foreign Secretary was “not ruling out” further direct help amid a row over her approach to spiralling fuel bills.

On Friday, Ms Truss said in an interview with the Financial Times that she would approach the problem “in a Conservative way of lowering the tax burden, not giving out handouts”.

However, supporters of Ms Truss, including her former leadership rival Penny Mordaunt, claimed that her remarks were misinterpreted after they were seized on by Rishi Sunak’s campaign.

Asked repeatedly by the BBC’s Nick Robinson whether “handouts” would feature in the emergency budget that Ms Truss plans to introduce if elected, Mr Lewis said: “That would be pre-judging a Budget that we’ve not had yet.

“Liz has been very clear, she wants to make sure we are doing all we can to help people but based on a low-tax principle and that means putting more money in people’s pockets.

“We can’t yet predict what will be in that emergency Budget.”

Mr Lewis said that tax cuts were the “best way” to deal with another expected rise in the energy price cap in October, criticising Mr Sunak for being in a “very different place” on the economy.

He went on to acknowledge that Ms Truss’s proposals would not fully solve the problems facing Britons because of the global nature of the current crisis.

“She’s willing to do more to help people, but her focus is around doing it in a way that puts more money in people’s pockets, creating a high-growth economy with higher wages, more people in work,” he added.

“So rather than having handouts, what we do is have a low-tax economy that’s driving growth and therefore with people having more money in their pockets, they’re better placed to deal with some of the challenges that we see.”

At the weekend, Ms Mordaunt, the international trade minister, told Sky News: “It’s not that she’s ruling out all future help – that’s a misinterpretation of what she said.

“What she is looking at, though, is enabling people to keep more of the money that they earn.”

Differences in Ms Truss and Mr Sunak’s visions for the economy have come to dominate the current leadership contest.

Ms Truss has promised immediate tax cuts and to confront the “economic orthodoxy” of the past three decades, but Mr Sunak has dismissed her plans as “fairy tales” and called for support to be targeted and temporary.

Some £37 billion has been spent by the Government to mitigate rising energy costs to date, including £1,200 for eight million of the most vulnerable households.