FACT CHECK
Conservative leadership contest so far: fact checked
Another week, another TV debate analysed by the Full Fact team. The BBC’s debate focused largely on Rishi Sunak and Liz Truss’ plans for tax, the economy and dealing with the cost of living crisis
💷 Spending
Mr Sunak claimed that Ms Truss had promised £40 billion of “unfunded” tax cuts, and Ms Truss responded by saying this was “not true”. One tax advisory firm has estimated these plans will cost £40 billion, but other estimates do exist.
Most are above £30 billion, with the IFS saying that Ms Truss’s tax cuts alone would “cost more than £30bn – possibly considerably more”, depending on the precise details.
Ms Truss also used the debate to claim that “there is already headroom of approximately £30 billion in the budget”. The Office for Budget Responsibility did say that there was £30 billion of headroom against the fiscal targets in March. However, the rise in inflation since then may have affected this figure.
📉 Recession
Ms Truss went on to claim that the OECD had described Mr Sunak’s policies as “contractionary”, adding “that means it will lead to a recession.” It’s true that last month the OECD described the current overall fiscal policy of the UK government as “contractionary”.
Contractionary fiscal policy does slow economic growth, but it doesn’t necessarily mean that a country is heading towards a recession, which is defined as two consecutive quarters of negative economic growth.
Later in the debate Ms Truss claimed that a recession had been “predicted,” but forecasts on this are mixed.
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