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Senior Tory Says Leadership Candidates "Have To Be Honest" About Scale Of Cost-Of-Living Crisis

Oliver Dowden has said more financial support would be needed in the coming months (Alamy)

4 min read

Oliver Dowden has said an intervention on a "considerable scale" is needed by the next prime minister in order to help households through the rise in living costs.

The former Conservative Party chair, who is supporting Rishi Sunak's leadership campaign, said it was "almost certainly the case" that further government support would be needed to help deal with rising energy bills in the autumn.

Millions of the most vulnerable households are expected to receive £1,200 in support to help offset the increase in the cost-of-living, while others will receive a £400 rebate on their energy bills when they rise in October.

Inflation, which has hit levels not seen in the last three decades, is also set to continue rising this year, with Bank of England projections warning the UK is likely headed for a recession.

Speaking to Sky News on Monday, Dowden said the final leadership candidates had to be "realistic" about the state of the economy when making their pitch to enter Number 10. 

"Of course we need to be on top of this situation, and we need to be realistic and honest with people about the scale of the challenge we are facing," he said.

"With the scale of inflation that is coming down the line, something we haven't seen for almost 40 years. And with the fact that energy bills are going to go up, possibly towards £4,000."

Sunak has already U-turned on his opposition to cutting VAT on energy bills, a proposal which he claimed would save households around £160 each year.

But Dowden insisted the former chancellor was prepared to tackle the crisis, pointing to his record during the pandemic.

"We need to take bold and direct action in response to this," he said. 

"I think you have seen from Rishi Sunak when he was chancellor both in response to the furlough scheme, when he came up with that in a matter of days and saved millions of jobs and the action he and Prime Minister Boris Johnson took earlier this year, it is that kind of scale of intervention that is required."

But he said while there was "no doubt" about the need for further intervention, he claimed the next Prime Minister would not need to hold an emergency budget to introduce extra support.

"These things don't necessarily need to be done through an emergency budget, if you look at the £1,200 that was announced earlier this year, that wasn't through an emergency budget," he said.

"But there is no doubt we do need an intervention of a considerable scale to deal with this because we have to be honest with people about the scale of the challenge they are facing."

Asked whether he was admitting that further steps would be needed to be taken beyond the £1,200 support measures, he added: "Yes, I think that is almost certainly the case but we'll have to see exactly what the bills end up."

Leadership frontrunner Liz Truss has been accused of a U-turn over her claims there would be no "handouts" to help struggling families later this year.

Speaking to the Financial Times, Truss had said she would "look at what more can be done" in response to the recession warnings, but added: "The way I would do things is in a Conservative way of lowering the tax burden, not giving out handouts."

But Penny Mordaunt, who was knocked out of the leadership contest in third place and is now supporting Truss's campaign, said the comments had been misinterpreted.

"It's not that she's ruling out all future help," she told Sky News. "What she is looking at is enabling people to keep more of the money that they earn."

Truss has already announced some measures to help reduce bills, such as temporarily scrapping the green levy added to energy bills, but has argued that tax cuts are the main route through which she would help support families.

Mordaunt added: "It makes no sense to take money off of people and then to give it back in very, very complicated ways. We need to simplify this and we need to ensure that households are as resilient as possible and stop taking large sums of tax from people is one way of doing that."

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