Tory grandees who served in Margaret Thatcher’s final cabinet have warned that the former prime minister would never have approved of Liz Truss’s plan to slash £30bn off taxes funded by borrowing, as Rishi Sunak denounced his opponent’s plans as “immoral”.

With a bitter row over tax emerging as the defining issue in the race to succeed Boris Johnson, three members of Thatcher’s cabinet told the Observer that she would have taken a dim view of slashing taxes at a time of high inflation.This follows repeated claims that Truss has attempted to model herself on Thatcher in her attempt to win the leadership, which she has denied.

Chris Patten, Norman Lamont and Malcolm Rifkind all said that the former Tory leader would not have supported the tax-cutting plans. Patten said: “Margaret Thatcher was a fiscal Conservative who did not cut tax until we had reduced inflation. She was honest and did not believe in nonsense.”

Norman Lamont, a senior Treasury minister under Thatcher, said: “Mrs Thatcher strongly believed that cutting the deficit came before cutting taxes. She also believed that deficits were simply deferred taxation.” Malcolm Rifkind said that he was as “certain as I can be that she would be very unimpressed by funding tax cuts through increased borrowing, even if it wasn’t at a time of high inflation – but certainly when it is”.

“She believed that tax cuts should be funded either by economic growth that was already producing more revenue, or by cuts in public spending,” he said. “That’s what Thatcherism means. I think every single Tory, as well as lots of other people, believe in the desirability of tax cuts. But no Conservative would ever see it as an ideological imperative.”

Sunak, the former chancellor battling to defeat Truss in the race to become prime minister, described Truss’s plans as “immoral” on Saturday, warning that they would push up inflation, increase mortgage rates and damage the economy. He has also pledged tax cuts, but only after inflation has been reduced.

“Not only do I think it’s the wrong thing for the economy, I also believe that it’s immoral because there is nothing noble or good about racking up bills on the country’s credit card that we pass on to our children and grandchildren,” he said.

A spokesperson for Truss said: “Liz’s plans for tax cuts will reward people for their hard work and effort, allowing them to keep more of their hard-earned money. You cannot tax your way to growth.”

However, there are already concerns that the domination of tax cuts and plans to reduce the size of the state will see the Tories failing to hold together the coalition of traditional Tories and new “red wall” voters that secured the party an 80-strong majority at the last election.

Rachel Wolf, co-author of the 2019 Tory manifesto, said the leadership candidates needed to start talking about the agenda promised to voters in newly won seats to ensure the gains made at the last elections were not squandered. “This 2019 offer won by a landslide,” she said. “Every single focus group that we’ve done on myriad areas has confirmed that this offer is what people look for. I think when they make a judgment at the next election, it will in part be on the ability to deliver beyond the tax cuts in 2022, 2023 or 2024. I think they need to start talking about this.”

Wolf pointed to a new report by her Public First consultancy and the Health Foundation thinktank, which showed that voters were aware of the health inequalities that Johnson vowed to tackle as part of his levelling up agenda. The research found that 37% of 2019 Conservative voters would be less likely to support the Conservatives at the next election if health equalities, including lower life expectancy in poorer areas, worsened.

Wolf said that a failure to follow through on such commitments risked fostering populism on the right. “My fear is that if we don’t start showing an ability to understand and deliver on the kinds of issues that this report talks about, then voters who were very frustrated because they wanted change and who are feeling poor right now will feel rightly, desperately disappointed. It makes them much more open to populist arguments. I think there is a very high risk of a new right wing resurgence of [Nigel] Farage or potentially worse.”

The latest Opinium poll for the Observer found that Sunak is seen as slightly more likely to be a “good prime minister” by the general public than is Liz Truss, although the number who have no opinion of Truss is twice as high – suggesting that she remains unknown to many voters.

The poll found that 43% backed Sunak as a good prime minister, while 45% said he would be bad. Only 36% said Truss would be good, while 41% said she would be bad. Among 2019 Tory voters, 59% said Sunak would be good; 35% said he’d be bad while, 55% said Truss would be good; 29% said bad.