London Daily

Focus on the big picture.
Sunday, Jul 05, 2026

Javid denies Truss tax cuts plan will lead to increased borrowing

Javid denies Truss tax cuts plan will lead to increased borrowing

Latest high-profile backer of Tory leadership candidate says proposals ‘risky’ but not inflationary
Swingeing tax cuts pledged by Liz Truss will not lead to dramatically increased government borrowing or fuel inflation, her latest high-profile supporter, Sajid Javid, has claimed, in response to accusations the Conservative leadership frontrunner’s “dangerous” plans would exacerbate the cost of living crisis.

Taking aim at Rishi Sunak, Javid, his former Treasury protege, hit out at the ex-chancellor’s “business-as-usual” approach and added: “We can’t rely on increasing taxes again and again.”

Nearly a month to the day since the pair’s sensational resignation led to the downfall of Boris Johnson, Javid declined to endorse Sunak and instead backed Truss to become prime minister.

He said her immediate tax cut pledges were “risky”, but told Times Radio: “Not cutting taxes now is also risky and I think it’s the riskier option. There’s no risk-free option here and any leader has to grip this and come up with the right policy and I think that’s what Liz is offering.”

Having launched a failed attempt to be leader himself after quitting as health secretary last month, Javid became the latest in a trickle of MPs to jump on to Truss’s campaign.

He told Times Radio that Office for Budget Responsibility forecasts had about £31bn of “fiscal headroom” by 2024/25, “so that’s the first thing you can use to make tax cuts now”.

Not going ahead with a planned increase in corporation tax from 19% to 25% in April wouldn’t affect inflation figures, Javid said.

“It is not inflationary to not go ahead with a tax increase,” he said. “I don’t buy this argument that the things Liz is proposing, somehow they are all going to lead to higher inflation. In the long term they are going to help to fix the economy and that is the most important thing.”

A similar argument was made by the attorney general, Suella Braverman, also a Truss supporter, who said on Thursday: “We can’t afford not to cut taxes.”

It came hours before the Bank of England was expected to raise interest rates by half a percentage point – the biggest increase since 1995. The energy price cap will also be changed quarterly instead of every six months, Ofgem announced on Thursday.

Truss’s plans were called dangerous by Mel Stride, a Sunak supporter who chairs the Commons Treasury committee, given the economic outlook this autumn.

“What we must do now is avoid stoking the inflation and making the problem even worse,” Stride told BBC Radio 4’s Today programme. “One of the ways you can make the problem very significantly worse is by coming forward with large-scale, tens of billions of pounds’ worth, of unfunded tax cuts.”

He added: “The big decision, fiscally, here is around tax. You have to do it in a measured way and at the right time but not start coming forward with tens of billions of unfunded tax cuts right now.

“I think that would be really quite dangerous.”

Despite Sunak trailing by up to 30 points in polls of Conservative members, who have a month to vote in the leadership election, Stride said his candidate would “absolutely not” concede and claimed there was a “huge disconnect” between survey results and his experience.

Two Thatcher-era cabinet ministers also described Truss’s immediate tax cuts as reckless, and said the former prime minister would have been more welcoming of Sunak’s plan to wait until inflation was settled.

The final TV debate will be hosted at 8pm on Thursday night by Sky News, although the candidates will not go head-to-head. Instead they will separately face questions from a studio audience of Tory members followed by a one-on-one interview with Kay Burley.

Truss said at a hustings in Cardiff on Wednesday night that she wished the debates between the two leadership finalists had been conducted more privately and not so much in the public eye.
Newsletter

Related Articles

0:00
0:00
Close
NHS Maternity Reform Expands Central Oversight After Critical National Review
Dover Border Warnings Highlight Post-Brexit Pressure on Cross-Channel Trade
Private Nuclear Consortium Advances £35 Billion Small Reactor Strategy in UK
UK Labour Leadership Signals Shift Toward Reindustrialisation and Regional Power
House of Lords Debates Rail Nationalisation Bill to Create Great British Railways
Scottish Affairs Committee Expands Inquiry Into SNP Financial Conduct
Evri Launches £1.2 Million Defamation Case Against BBC Over Panorama Investigation
Port of Dover Warns of Border Delays as EU Entry-Exit System Looms
Nigel Farage Referred to Standards Watchdog Over Alleged Undeclared Benefits
UK Government Faces Scrutiny Over Claimed AI Datacentre Investment After FOI Findings
UK and India Finalise Trade Agreement Rules Ahead of Mid-July Implementation
UK Government Establishes National Maternity Commissioner After Major Review of NHS Care Failures
Private Consortium Plans £35 Billion UK Nuclear Programme Targeting Small Modular Reactor Rollout
Andy Burnham Sets Out Ten-Year Reindustrialisation and Devolution Plan as Leadership Transition to UK Premiership Advances
Morocco and France Advance as 2026 FIFA World Cup Enters Quarterfinals.
Historic 2026 Tour de France Opens in Barcelona With Revamped Team Time Trial.
Global Mergers and Acquisitions Approach $4 Trillion Defying Geopolitical Tumult.
Negotiators Advance 20-Point Framework for Gaza Ceasefire and Demilitarization.
OECD Warns Middle East Conflict Will Depress Global Economic Growth.
Ukrainian Drones Strike Major Oil Terminal in St. Petersburg.
World Meteorological Organization Issues Urgent Alert Over Rapidly Intensifying El Niño.
United States Commemorates 250th Anniversary With Diplomatic Summits and Global Flotilla.
Iran Begins Days-Long Funeral for Supreme Leader Khamenei Amid Strait of Hormuz Standoff.
Technology giant reports surging carbon emissions driven by artificial intelligence infrastructure demands.
Artificial intelligence adoption accelerates workforce reductions across the technology and financial sectors.
Global technology and financial conglomerates collaborate to launch a new stablecoin standard.
United States regulators lift export restrictions on a major frontier artificial intelligence model.
Royal Society Exhibition Highlights Growing Focus on Public Trust in Science
Energy Costs and Supply Chain Risks Continue to Shape UK Business Strategy
Rapid Rise in Artificial Intelligence Adoption Reshapes UK Corporate Operations, ONS Says
UK Businesses Turn Defensive as Economic Outlook Weakens, Institute of Directors Data Shows
UK Government Faces Criticism Over Late Extension of Pub Hours for England Match
Inquest Continues Into Death of Noah Donohoe as Jury Deliberates Findings
Calls for Stronger Wildlife Attraction Safety Rules After Crocodile Enclosure Injury
City Fire Under Control After Major Blaze Sends Smoke Across Urban Area
Police Investigation Continues After Officer Killed During Road Closure Duties
Blackpool Hotel Fined £120,000 After Electric Shock Incident Involving Child
Whistleblowers Allege Delays in UK Special Educational Needs Support Services
Calls Grow for Improved Support for UK Armed Forces Personnel Facing Health Conditions
Rising UK Energy Price Cap Increase Prompts Wider Concerns Over Household Pressures
UK Businesses Remain Concerned Over Global Conflict Risks to Supply Chains, ONS Finds
Office for National Statistics Reports Rising Adoption of Artificial Intelligence Across UK Businesses
Institute of Directors Reports Deepening Pessimism in UK Business Confidence Index
England Prepare for World Cup Round of 16 Match Against Mexico in Mexico City
Royal Society Summer Science Exhibition Concludes in London After Week-Long Showcase of Research
Silverstone Hosts British Grand Prix as Lando Norris and Lewis Hamilton Lead Home Crowd Expectations
Cornwall Van Dwellers Face Homelessness Risk as Council Tightens Enforcement
Police Investigate Stabbing of Iranian Journalist in London
Rare Copy of US Declaration of Independence Discovered in UK Archive
Department for Education Data Shows Persistent Literacy Gap Among Disadvantaged White Pupils
×