London Daily

Focus on the big picture.
Tuesday, Mar 03, 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
UK Arrests Prominent Figures Linked to Epstein Network as Questions Mount Over US Action
Trump Says UK ‘Took Far Too Long’ to Approve Use of Airbases for Iran Strikes
Scope of Britain’s Role in the Expanding Middle East Conflict Comes Under Scrutiny
Trump Says He Is ‘Very Disappointed’ in Starmer Over Iran Comments
U.S. Embassy in Riyadh Struck by Drones Amid Escalating Iran Conflict
Starmer Confronts Strategic Test After Drone Strike Near British Base in Cyprus
Rolls-Royce Chief Signals Openness to Germany Joining UK-Led Fighter Jet Programme
UK Stocks Slip as Escalating Iran Conflict Triggers Global Market Selloff
UK Overhauls Asylum System to Make Refugee Status Temporary
Starmer Warns of ‘Reckless’ Iranian Strikes Amid Escalating Regional Tensions
British Base in Cyprus Targeted as Drones Intercepted Amid Expanding Iran Conflict
Starmer Diverges from Trump on Iran Strategy, Rejects ‘Regime Change from the Skies’
U.S. and Israel Intensify Strikes on Iran as Conflict Expands to Lebanon and Gulf States
Violent Pro-Iranian Protesters Storm U.S. Consulate in Karachi
Missile Debris Sparks Fires at Dubai’s Jebel Ali Port Near Palm Jumeirah
Iran Strikes U.S. Fifth Fleet Headquarters in Bahrain Amid Wider Gulf Retaliation
When the State Replaces the Parent: How Gender Policy Is Redefining Custody and Coercion
Bill Clinton Denies Knowing Woman in Hot Tub Photo During Closed-Door Epstein Deposition
Former U.S. President Bill Clinton Testifies on Ties to Jeffrey Epstein Before Congressional Oversight Committee
Dyson Reaches Settlement in Landmark UK Forced Labour Case
Barclays and Jefferies Shares Fall After UK Mortgage Lender Collapse Rekindles Credit Market Concerns
Play Exploring Donald Trump’s Rise to Power by ‘Lehman Trilogy’ Author to Premiere in the UK
Man Arrested After Churchill Statue Defaced in Central London
Keir Starmer Faces Political Setback as Labour Finishes Third in High-Profile By-Election
UK Assisted Dying Bill Set to Fall Short in Parliament as Regional Initiatives Gain Ground
UK Defence Ministry Clarifies Position After Reports of Imminent Helicopter Contract
Independent Left-Wing Plumber Secures Shock Victory as Greens Surge in UK By-Election
Reform UK Refers Alleged ‘Family Voting’ Incidents in By-Election to Police
United Kingdom Temporarily Withdraws Embassy Staff from Iran Amid Heightened Regional Tensions
UK Government Reaches Framework Agreement on Release of Mandelson Vetting Files
UK Police Contracts With Israeli Surveillance Firms Spark Debate Over Ethics and Oversight
United Airlines Passenger Hears Cockpit Conversations After Accessing In-Flight Audio Channel
Spain to Conduct Border Checks on Gibraltar Arrivals Under New Post-Brexit Framework
Engie Shares Jump After $14 Billion Agreement to Acquire UK Power Grid Assets
BNP Paribas Overtakes Goldman Sachs in UK Investment Banking League Tables
Geothermal Project to Power Ten Thousand Homes Marks UK Renewable Energy Milestone
UK Visa Grants Drop Nineteen Percent in 2025 as Migration Controls Tighten
Barclays and Jefferies Among Banks Exposed to Collapse of UK Mortgage Lender MFS
UK Asylum Applications Edge Down in 2025 Despite Rise in Small Boat Crossings
Jefferies Reports Significant Exposure After Collapse of UK Lender MFS
FTSE 100 Reaches Fresh Record Highs as Major Share Buybacks and Earnings Lift London Stocks
So, what's happened is, I think, government policy, not just under Labour, but under the Conservatives as well, has driven a lot of small landlords out of business.
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
From fears of AI-fuelled unemployment to Big Tech's record investment, this is AI Weekly.
Apple just dropped iOS 26.4.
US Lawmakers Seek Briefing from UK Over Reported Encryption Order Directed at Apple
UK Business Secretary Calls on EU to Remove Trade Barriers Hindering Growth
Legal Pathways for Removing Prince Andrew from Britain’s Line of Succession Examined
PM Netanyahu welcome India PM Narendra Modi to Israel
×