Policy watch: Where Liz Truss and Rishi Sunak stand on the key issues

Liz Truss and Rishi Sunak have doubled down on their competing solutions to take Britain forward and address the cost-of-living crisis - Colin D Fisher
Liz Truss and Rishi Sunak have doubled down on their competing solutions to take Britain forward and address the cost-of-living crisis - Colin D Fisher

The Tory leadership battle has reached the halfway point with Rishi Sunak and Liz Truss intensifying their bids to become the next prime minister.

The eighth members' hustings is set to take place tonight, August 17, in Belfast.

The cost-of-living crisis has been at the centre of both candidates' campaigns and policy announcements.

The Telegraph revealed on August 13 that Ms Truss is considering stripping the planned £400 energy bills discount from “high earners”.

A Truss campaign source said: “Under Rishi's plans, Premier League footballers would receive a handout. How is that right?”

Two former party chairmen have warned that Tories must unite behind Ms Truss as leader or risk losing the next election.

In a joint article for The Telegraph, James Cleverly and Brandon Lewis said Ms Truss was a “unifier” whose backers represented a range of traditions and beliefs across the party.

Ms Truss's hopes of winning the leadership race received a major boost when 11 Tory whips declared their support for her on August 16.

Ms Truss and Mr Sunak have committed to supporting people this winter through the cost-of-living crisis but have confirmed that no emergency budget will be put in place until the leadership contest is over.

Mr Sunak has suggested he would be prepared to implement Covid-scale interventions if necessary. Ms Truss, on the other hand, has stated she would reverse the National Insurance rise and hold an emergency budget to implement immediate tax cuts, although she has not ruled out the use of handouts either.

The former chancellor is pitching himself to the party and members as the serious candidate on the economy, who can guide the country through a potential recession.

Mr Sunak has promised the biggest income tax cut in 30 years, vowing to slash the basic rate from 20 per cent to 16 per cent within seven years as he battles to close the gap with his rival. The move would mean millions of households paying a fifth less in income tax.

Meanwhile, Ms Truss is marketing herself as a Thatcherite who also promises tax cuts, foreign policy experience, and a track record of delivery.

Here is where the final two candidates stand on the key questions:

Rishi Sunak

Taxes: The former chancellor has promised the biggest tax cut in 30 years if he becomes prime minister, vowing to slash the basic rate from 20 per cent to 16 per cent within seven years. Someone earning the average UK salary of £32,000 would save about £777 under the plans.

He has vowed to scrap VAT on energy bills for a year, delivering, he says, a saving of around £200 on the average household bill as energy prices soar this winter. He is also promising a major new investment tax cut this autumn, replacing the so-called "super deduction".

At the hustings event in Darlington on August 9, Mr Sunak suggested he would commit tens of billions of pounds to tackling the cost-of-living crisis, while Ms Truss is yet to be drawn on whether she would provide any direct payments to Britons.

He also vowed on August 9 to slash business rates this autumn as he warned Ms Truss’s economic plans would see the Tories get “absolutely hammered” at the next election. He said supporting high streets would be “top of my mind” when asked by a Conservative member whether he would cut taxes on struggling shops.

Mr Sunak had previously been resisting calls for immediate tax cuts amid the cost-of-living crisis, instead saying the nation needs "honesty and responsibility, not fairytales". He had pledged to focus on getting inflation under control and only cut taxes once that happens, presenting his position as "common-sense Thatcherism".

Borrowing: Mr Sunak has repeatedly said that the nation must balance its books. He has warned that "borrowing your way out of inflation isn’t a plan" and challenged Ms Truss on her promise to borrow more to fund her tax cuts. He said: "That is the country’s credit card and it’s our children and grandchildren, everyone here’s kids will pick up the tab for that. There’s nothing conservative about it."

He has insisted he would not promise tens of billions of pounds of “goodies” - a reference to his rival’s promises - because it would fuel inflation.

He added: “We in the Conservative Party need to get real and fast because the lights on the economy are flashing red and the root cause is inflation.”

Net Zero: He has committed to keeping the target of making Britain carbon neutral by 2050. To achieve that he would oversee a massive expansion in offshore wind farms. At a hustings on August 3, he was accused of a major U-turn on onshore wind after announcing he would scrap a ban on new turbines. He wants to make the UK energy self-sufficient by 2045.

Trans: The former chancellor has made it clear where he stands on trans rights. He said: "The fact that we have to have a conversation about what a woman is is quite frankly extraordinary. As a parent of two young girls and married to one, I know exactly what a woman is. We don’t need to have a debate about it. I am going to stand up for women’s rights, whether it is the language that people are now trying to erase from public life, access to changing rooms, sports – we need to stand up for women’s rights. It is not bigoted or somehow narrow-minded to say that." Mr Sunak launched his campaign by pledging a new "manifesto of women’s rights". He has pledged to protect the terms "women" and "mother" as he blamed the Equality Act for promoting "woke nonsense".

Brexit: Mr Sunak voted Leave and has said taking back control of lawmaking will give Britain a competitive economic edge. He has pledged to scrap or reform all remaining EU rules on the UK’s statute books by the next election and wants to overhaul Brussels red tape clogging up the City. He has attacked Ms Truss for voting Remain.

Scotland: The cost-of-living is the priority - "not another divisive, unnecessary, unconstitutional referendum", Mr Sunak said in a message to Nicola Sturgeon at a hustings in Perth on August 16. Mr Sunak pledged not to "ignore" Ms Sturgeon, but to "take her on" and beat the SNP at the ballot box. "We have to deliver the economic growth," he said. "We can't trust the SNP to do it, can we? They can't even get the ferries to work. I don't want to ignore Nicola Sturgeon, I want to take her on and beat her."

Defence: He has vowed to stick to the Nato target of spending two per cent of GDP on defence and has suggested he would exceed that, saying it is a floor not a ceiling. But he has refused to commit to the "arbitrary" 2.5 per cent rise promised by Boris Johnson.

Housing: Mr Sunak has pledged to speed up building in cities and on brownfield sites as well as cracking down on "landbanking" by big developers. He has suggested he wants to see government funding for affordable housing scaled back, with more incentives put in place for developers to build homes poorer people can afford to buy. He has also pledged to prevent encroachment on the green belt.

Immigration: The ex-chancellor would keep the Rwanda policy, saying it is "absolutely critical that we have control of our borders". He has said a tough approach is needed to foil "an illegal set of criminal gangs who were causing people to die in pursuit of coming here". Mr Sunak has pledged a "three strikes and you’re out" rule to deport more foreign criminals.

Education: During the first hustings event with Conservative members on July 28, Mr Sunak originally appeared to say he wanted to bring grammar schools back in England. But his team later confirmed he only meant expanding existing selective schools.

The former chancellor has vowed to phase out university degrees with low "earning potential". Pitching his reforms to post-16 education, Mr Sunak said he would create a "British Baccalaureate" in order to prevent students from dropping maths and English. Mr Sunak also vowed to create a ‘Russell Group’ of technical colleges to provide young people with a prestigious alternative to university if he becomes Prime Minister.

NHS: Mr Sunak would introduce a £10 fine for missed GP and hospital appointments as part of a "transformative" shake-up of the health system. He said that patients would be given "the benefit of the doubt" the first time they miss an appointment, but subsequent absences would incur charges. The system would be "temporary" as the NHS tries to clear the Covid-19 backlog of more than six million patients waiting for planned care.

Liz Truss

Taxes: Ms Truss is drawing up Thatcherite plans to give No 10 more control over the economy, The Telegraph understands. The Foreign Secretary has announced £30 billion worth of tax cuts and would start to implement them "from day one". She would reverse the National Insurance hike that came into force in April and lift green levies on energy bills for two years. She has also said she would review inheritance tax as part of a general review of Britain’s tax system. She argued her tax cuts, including scrapping the corporation tax rise and reversing the National Insurance increase, would help avert the downturn and prevent a recession. Ms Truss could also pull the UK out of a deal agreed by Mr Sunak to “stitch-up” global corporation tax rates at 15 per cent.

Ms Truss will not repeat a Rishi Sunak-style universal payout to help all households with their energy bills if she becomes prime minister, according to an MP involved in her campaign. On August 9, Ms Truss repeatedly refused to be drawn on whether she would sign off billions of pounds more in spending to help families with the energy bills increase coming this October. On August 11, Ms Truss rejected calls to increase the windfall tax on energy companies to fund cost-of-living handouts for households.

Borrowing: She has said that she plans to pay for tax cuts by putting the Covid debt on a "longer-term footing", akin to the nation's war debt from the 1940s. That would potentially involve refinancing the £311 billion borrowed during the pandemic so that it was paid back over a much more drawn out period.

Net Zero: Ms Truss backs the target overall but has said "we need to reach net zero in a way that doesn’t harm businesses or consumers". She is "very supportive of using gas as a transition fuel" and has suggested she would end the ban on fracking so it could go ahead in areas where there’s local consent. At the Cardiff hustings she said she was an "environmentalist before it was fashionable" and recalled Margaret Thatcher leading the charge on that.

Trans: The Foreign Secretary has hit out at "ludicrous debates about pronouns" and as equalities minister scrapped plans to reform the law so people could change gender without a medical diagnosis.

Brexit: She vociferously supported Remain during the 2016 referendum but has since transformed herself into one of the most steadfast Brexiteers in the Government. She has driven forward plans to override the Northern Ireland Protocol and has said she now regrets voting to stay in the EU. When challenged by Mr Sunak during a TV debate over why she voted Remain in 2016, she said: "Maybe I’ve learnt from that."

Scotland: Ms Truss has pledged that there will be no second referendum on Scottish independence "on my watch", as she vowed to strengthen and defend the Union. She vowed at the hustings on August 16 in Perth to work closely with Douglas Ross and his team at Holyrood to call out SNP shortcomings in office.

Foreign workers: Ms Truss has proposed allowing thousands more foreign workers to come into UK each year to temporarily take up agricultural jobs like picking fruit. She wants a "short-term expansion" to what is known as the seasonal workers scheme.

Defence: Ms Truss has described herself as a "freedom fighter" on Ukraine, telling Conservative Party members they could trust her to do all she can to ensure Vladimir Putin is defeated. Ms Truss would increase spending on the military to three per cent of GDP by the end of this decade and "review" the plan to cut the size of the army to 72,500. She has said Russia’s invasion of Ukraine shows the West has not dedicated enough funding to defence. Ms Truss has also unveiled plans to boost trade between Commonwealth nations and stop China from buying up influence in some of the world’s fastest developing countries.

Housing: The Foreign Secretary has pledged to rip up "Stalinist" housing targets and would make it quicker and easier for developers to build on brownfield land in "opportunity areas". She has said the UK needs to "build up more" in cities and "it’s very important that we have policies that have local consent".

Immigration: She "completely agrees" with the Rwanda policy and says "we need to have further reforms in the UK to make sure we can really stop illegal immigration". She has said she wants to see reform to the way ECHR rulings are applied in Britain but "would be prepared" to withdraw from it if necessary. Ms Truss also vowed on August 16 to keep the Royal Navy in charge of patrolling the Channel to combat illegal migrants after it was revealed that it planned to withdraw from the role next year.

Education: Ms Truss has pledged to give all students who receive three A*s at A-level an automatic Oxbridge interview. She said that Oxford and Cambridge should give all top students a chance for a place, as she warned some teachers discourage applications because the universities are "full of toffs". She also suggested she supported delaying university admissions until after students have received their exam results, abandoning the system of applications based on predicted grades.