Tory leadership - live: Sunak warns ‘we’ll lose election if inflation rampant’ as Truss heckled

Liz Truss is now speaking with the hustings host, former No 10 adviser Jimmy McLoughlin, and has defied conventional wisdom with a claim that people in the UK below the age of 30 are “natural Conservatives”.

“They’re more likely to have started up their own business than older generations, they’re more likely to have a ‘side hustle’,” the foreign secretary said, describing “a real generation of self-starters who have had to cope with the difficulties of Covid”.

The Covid pandemic has created a sort of resilience in her daughters, Ms Truss added, saying that Tories must show they are on the side of this generation, by making it easier for people to get on the housing ladder and “looking at levels of interest in the student loan system” to make sure people are getting “a fair deal”.

Mostly, the government must show there is hope, and an optimistic future ahead of us, Ms Truss said, talking about unleashing investment in our economy to the tune of tens of billions, adding: “We can create the British version of Silicon Valley.”

Economic forecasts “are not destiny”, Ms Truss said, warning we should “not be talking ourselves into a recession”.

People may know that I have a “dubious past”, Liz Truss has said of her youth as a Lib Dem activist, saying: “We all have teenage misadventures and that was mine.”

Asked if that was the naughtiest thing she’d ever done, the foreign secretary drew laughs from the audience as she added: “Some people have sex, drugs and rock ‘n’ roll, I was in the Liberal Democrats.”

During audience questions to Liz Truss, another protester has interrupted proceedings to warn about climate breakdown.

“Someone obviously has a mic who shouldn’t have one,” an audience member at the hustings could be heard remarking.

Ms Truss said: “I take it as a compliment that I’m so popular with Extinction Rebellion.”

Liz Truss has said it is “important that we get more people back into offices because we need to make sure that our town and city centres thrive”.

The foreign secretary said that “while it worked to some extent during Covid, I certainly got Zoom fatigue and there were a lot of people in the Civil Service got Zoom fatigue, so I think we do need to try and encourage people to come into the office more than they do at present.”

An audience member has suggested that Vladimir Putin “must have been over the moon when Boris Johnson fell”, asking what Liz Truss would do to make the Russian president “less smug and put heart into the gallant Ukrainians”.

Praising Mr Johnson, the foreign secretary said she didn’t “think many leaders have achieved” having a street in Ukraine and croissant named after them, adding: “It is because of the leadership we’ve shown in Ukraine.”

“I will continue to stand up to Putin, stand up to [Russian foreign secretary Sergei] Lavrov”, adding: “It is important that it’s not just about rhetoric, but it’s also hard security the UK is investing in. That’s why I intend to increase defence spending to 3 per cent of GDP.”

Asked whether he would release data on various issues going wrong, Rishi Sunak advocates reforming public services to cut people’s taxes.

He said that, unless inflation is under control, “we can kiss goodbye to winning that next election”.

Asked by the host and former Downing Street adviser Jimmy McLoughlin what his pitch to win a fifth term would be, Mr Sunak said: “Well, the first thing we need to do in order to make sure we can win that election is have got through this inflation problem by then.

“And that’s why I’m particularly worried about policies that risk making it worse and last longer.

“Because this is a problem that isn’t just for this winter. It’s a problem for next winter as well, and beyond.

“Because as the Bank of England said they are worried about inflation becoming embedded, then there’s no hope that we’re going to win that next election. Absolutely none. It’s as simple as that.

“We all heard what they said yesterday, all of you saw the numbers. And if we don’t get a grip of this thing and get a grip of it fast, then we can kiss goodbye to winning that next election.

“So the first thing to put ourselves in a position to win is to get through inflation and get through it quickly and not do things worse.”

Mr Sunak blamed developers for sitting on land and said he wanted to crack down on them, including buying back land they were sitting on.

No option should be off the table over whether to leave the European Court of Human Rights, Mr Sunak says.

Not being able to tell countries to take back failed asylum-seekers was “clearly bonkers”, he added. And the UK must have control of its borders.

An audience member reveals that a paper sent to members outlining the candidates’ policies made no mention of the climate crisis.

Mr Sunak said he believes in the net-zero target but rushing would mean losing support.

It was about building innovation, he claimed, and unlocking the ingenuitiy of the private sector, he said.

Mr Sunak took a swipe at Ms Truss’s plan to ditch the large rise in corporation tax.

On what he will do to help businesses grow, the former chancellor told the Tory leadership hustings in Eastbourne: “We have had this debate on corporation tax. I don’t want to stick with the failed policies of the past. That’s what some people are suggesting. It hasn’t worked.

“If we want businesses to actually invest in the economy, to expand their factories, to put more lines in, to produce more things, that’s how we create more jobs. That’s how we get inflation down, if companies are producing more. We need to cut the taxes on those things.”

He added: “Focusing on corporation tax hasn’t achieved that. Investment in this economy today, no better than it was a decade ago, in spite of us doing all those things on corporation tax.

“Because it’s not the right tax to focus on. And that’s where my experience in business, my time as chancellor, my conversations with business have led me to the conclusion we need to be much more radical.

“We need to reform business taxes to cut them on the things that make a difference. And that’s business investment, business innovation. If we get those tax cuts in place, then we can help those businesses expand, grow, create jobs and prosperity and crucially help get inflation down.”