Liz Truss has pledged to immediately reverse Rishi Sunak’s rise in National Insurance (NI) contributions if she becomes prime minister.
Truss said she would do so at a cost of living crisis emergency budget held within weeks of becoming PM, rather than waiting until April next year, which reportedly her team previously thought was the earliest date the NI reversal could be implemented.
The winner of the Conservative Party leadership contest will be announced on 5 September.
Truss, considered the frontrunner in the contest with Sunak, wrote in the Sunday Telegraph that she would "hit the ground running" with the budget.
“I would use this to immediately tackle the cost of living crisis by cutting taxes, reversing the rise on national insurance and suspending the green levy on energy bills.”
While the threshold at which employees start paying NI was raised last month, giving people a boost in their pay packets, ex-chancellor Sunak had already overseen a controversial 1.25 percentage point increase to NI in April to help pay for health and social care.
Truss previously told Sunak at a leadership debate that the NI rise was “morally wrong” at a time “when families are struggling to pay for food”.
Watch: Truss wrong to rule out direct support to pay bills - Sunak
Sunak’s campaign has dismissed Truss’ plan. Sunak backer Oliver Dowden labelled the planned NI reversal “insufficient” with the average energy bill set to approach £4,000 a year from October.
Foreign secretary Truss has said tax cuts, not “handouts”, would help families with rocketing bills this winter.
Sunak - who as chancellor announced a £400 energy bill rebate to be claimed in six monthly instalments from October - has pledged more direct help to people impacted most by the cost of living crisis.
He said: “It’s simply wrong to rule out further direct support at this time as Liz Truss has done, and what’s more, her tax proposals are not going to help very significantly people like pensioners or those on low incomes who are exactly the kind of families that are going to need help.”
Truss, meanwhile, has also targeted the so-called “green levy” on energy bills. As previously explained by Yahoo News UK, the green levy is an environmental charge added to energy bills. It currently makes up 8% - £153 - of the average annual energy bill.
The levy has been opposed by green-sceptic Tories, including the Net Zero Scrutiny Group. Robert Halfon, a senior MP on the Tory backbenches, told the Telegraph the levy is a “millstone around people’s necks” and that “you can’t balance environmentalism on the backs of working people".