Ken Clarke Accuses Liz Truss And Rishi Sunak Of “Half-Baked” Economic Crisis Response
Former chancellor Ken Clarke has criticised Conservative Leadership contenders' response to the cost of living crisis. (Alamy)
Exclusive: Former chancellor Ken Clarke has accused Tory candidates Liz Truss and Rishi Sunak, as well as Labour leader Keir Starmer, of offering “half-baked” ideas on the economy.
He has also criticised the three hopefuls for “pursuing the votes of the older, quite prosperous, middle-class population” at the expense of tackling government debt, and said they are all “guilty of trying to cheer up better-off pensioners”.
With inflation and energy prices at historic highs, the UK is braced for a major economic crisis this winter. New research published by The Guardian on Thursday showed that two-thirds of households could end up in fuel poverty by January.
While Sunak has stood by a package of relief measures introduced when he was still chancellor earlier in the summer, and Truss has promised tax cuts to boost people’s income, neither are willing to set out further detail until the winner enters No 10 on 5 September. Both have faced criticism that proposals do not currently match the scale of the crisis.
In an interview with The House magazine, Conservative grandee Clarke said those vying to become the next prime minister were “throwing money at the problem every day in their campaigning at the moment” and “can't carry on doing that”.
“The three would-be prime ministers are all arguing about how to pump money in and take tax off you, then give some of it back to help you pay the bills,” Lord Clarke said.
“The trouble with things like taking off the green levy, or abolishing VAT on power, or certainly cutting income tax, is that it helps absolutely everybody.
“It gives the most help to the better-off because they have the highest earnings. They also have the most capital and, with their two houses and things, they probably consume more energy than anybody else.
“If you cut income tax, that doesn't really help anybody below average wage income significantly at all. And multimillionaires – it's worth tens of thousands of pounds, at least, to them. They're no doubt very grateful, but they don't actually need it.”
During the leadership campaign, Sunak has committed to scrapping VAT on household fuel bills, while Truss has promised to reverse the National Insurance rise and to suspend green levies on energy bills.
“It's most unfortunate that in the crazy atmosphere we have at the moment, which is so enraging the public and causing so much damage to public confidence in the political class and political system, all three of the would-be prime ministers are slightly competing with each other,” Clarke continued.
“They feel it necessary to produce, every day sometimes but certainly every week, some new, half-baked, bright idea that hasn't been worked up properly.
“They're all pursuing the votes of the older, quite prosperous, middle-class population, who they think are the ones whose votes are floating and they have to win. All three of the contenders, to a certain extent, are guilty of trying to cheer up better-off pensioners and get their support.”
Starmer has defended Labour’s proposal to freeze the energy price cap, which would benefit high-income households, by arguing that a measure applied across the board would also help limit inflation.
Clarke predicted a “very severe recession” and “very difficult winter” ahead, describing his view of the economic outlook over the coming years as “pessimistic”.
“I think we are going to see two-three years, possibly, in which living standards generally come under great strain and do fall comparatively for quite a number of the population. It's too late to avoid that.”
The former MP for Rushcliffe, who served in cabinet under Margaret Thatcher, John Major and David Cameron, has refused to comment on the race until now. He has not publicly backed any candidate in the contest.
The full interview will be in the next edition of The House, published next month.
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