Liz Truss plans non-'Thatcherite' tax cuts, say members of former PM's cabinet

Three senior officials in Margaret Thatcher's government have said the former prime minister would not approve of Liz Truss' plans to cut taxes if she reached 10 Downing Street.

Comments came as Ms Truss and her rival Rishi Sunak invoked the memory of Lady Thatcher in their bids for the backing of the 160,000 Tory members who will choose the party's new leader and Prime Minister.

Sunak took advantage on Saturday of a visit to the former Prime Minister's hometown of Grantham to denounce Ms Truss' plans for £30billion in immediate debt-funded tax cuts as 'immoral', and to 'insist that Thatcher delay such a move until inflation is brought under control.

But Ms Truss said the most important thing to her about the 'fantastic' Thatcher was his willingness to "challenging groupthink" on economics.

“There were 364 economists who opposed Mrs Thatcher’s plan, and what we are doing right now, economic policy right now is not producing the economic growth that we need,” he said. - she told the Mail on Sunday.

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However, three members of Lady Thatcher's last cabinet have now spoken out to say that the 'Iron Lady' - who was Premier minister from 1979 to 1990 and remains a totem for Tory members today - would have viewed Truss's plans with a dim view.

Norman Lamont, who was chief secretary to the Treasury under Thatcher and later served as chancellor, told The Observer: "Mrs Thatcher was a firm believer that deficit reduction came before tax cuts. She also believed that deficits were simply deferred taxes."

Sir Malcolm Rifkind, Scottish Thatcher Cabinet Secretary and later Foreign Secretary, said he was as "sure as possible that she would be very unimpressed with funding tax cuts by increasing borrowing, even if it weren't in times of high inflation - but certainly when it is."

He said added: "She believed that tax cuts should be funded either by economic growth that was already producing more revenue, or by cuts in public spending. This is what Thatcherism means. I think all Conservatives, and many other people, believe in the value of tax cuts. But no Tory would ever see it as an ideological imperative."

And Chris Patten, who was environment secretary under Thatcher before being named party chairman by her successor John Major, told the newspaper: "Margaret Thatcher was a fiscal conservative who didn't cut taxes until we cut inflation. She was honest and didn't believe in nonsense."

Ms Truss said if elected leader of the Tories on September 5 she would reverse the 1.25% rise in National Insurance contributions of Mr Sunak, would drop a planned 19-25% increase in corporate tax and suspend green levies on energy bills.

Mr Sunak warned yesterday that cuts in immediate taxes risked fueling inflation and driving up mortgage interest rates at a time when UK debt was at an all-time high.

"Not only do I think that it's a bad thing for the economy but I also think it's immoral because there's nothing noble or good about racking up bills on the credit card of the country we're moving to our children and grandchildren," he said.

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