Truss supporter defends tax plan after Tony Blair says it would only save poorest 76p but richest get £93

12 August 2022, 08:34 | Updated: 12 August 2022, 08:35

Dr Coffey defended Liz Truss from Tony Blair's institute's criticisms
Dr Coffey defended Liz Truss from Tony Blair's institute's criticisms. Picture: Getty/LBC

By Will Taylor

Liz Truss's tax plans will benefit the average working household, a minister has insisted after Tony Blair said it would only help the richest.

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The former Prime Minister's institute said her plans to reverse the recent hike in National Insurance contributions would save just 76p a month for those on the lowest incomes – but £93 for the richest households.

Pensions secretary Thérèse Coffey said Mr Blair "has got nothing to shout about" as she defended her choice for Tory leader and Prime Minister on LBC's Nick Ferrari at Breakfast.

Speaking after it was confirmed the economy shrunk by 0.1% amid recession fears, she said: "This is, I think, an average of about £170 for working households is my understanding.

"However, the important thing I think Liz Truss takes in her economic plan is, we heard this morning the economy is contracted, and understandably we want it to grow.

"Sadly, the Bank of England forecast is for a deeper recession than perhaps Government would like, and that's why Liz wants to set out more of an approach about how we get that growth, and also put more money into the pockets of people straight away by reducing things like the National Insurance levy."

Thérèse Coffey put on the spot over Liz Truss 'getting her sums wrong'

But pushed on the Tony Blair Institute's criticism of her plan, Ms Coffey said: "Frankly, Tony Blair has got nothing to shout about in helping the poor during the financial crisis that happened under Gordon Brown's watch, not helped by Tony Blair's legacy.

"No extra support was given to people on very low incomes, far from it, and in fact this Government has stepped up and helped households."

Mr Blair's institute also said that plans to cut VAT on fuel would have "little to no impact" on low income households, and inflation and increased energy costs will leave them more than £50 worse off every month from October without Government intervention.

Read more: Truss vows no windfall tax for energy firms as Boris accused of doing nothing to help families pay soaring bills

Liz Truss wants to reverse the recent National Insurance hike
Liz Truss wants to reverse the recent National Insurance hike. Picture: Getty

Poorer households could then see a hole in their finances of 10% or more of their income by next spring thanks to expected rises in energy costs in January and April.

It proposed instead paying £55 to people on means-tested benefits on top of existing Government help – like the £400 discount on energy bills from October – which would cost £2.5bn.

The institute also recommended raising benefit entitlements by £83 a month next year, and extending the universal £67 a month help for energy bills next year, at a cost of £30bn.

Ms Truss and her leadership rival Rishi Sunak have said they will review in future if more help is needed for families as the cost of energy bills becomes clearer later in the year. The price cap is due to go up by a significant amount in October.

Ms Truss meanwhile has vowed not to put a windfall tax on energy businesses because it could "bash" business.

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