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Penny Mordaunt has come under attack from Tory leadership rivals for her tax and spending plans and her record on transgender issues as the remaining contenders faced off in the first TV debate.
The international trade minister was accused by former chancellor Rishi Sunak of promising billions in tax cuts which would simply fuel inflation.
Appearing before a Channel 4 studio audience, Ms Mordaunt said the attacks showed she was the candidate to beat after she finished an unexpectedly strong second in the first two rounds of voting by MPs.
“I take it as a big fat compliment that no-one wants to run against me,” she said.
Ms Truss, the Foreign Secretary who is seeking to overhaul Ms Mordaunt to secure a place in the final ballot of party members, insisted she was running an “entirely positive” campaign.
She nevertheless joined Ms Badenoch in questioning Ms Mordaunt’s account of her record on gender self-identification in the first flashpoint of the evening.
She said that while she had carried out a consultation on the Gender Recognition Act, she had never been in favour of self-ID.
“I can’t imagine why people are not comprehending what I say and have been regurgitating this issue for weeks and weeks,” she said.
“I’m a woman, I’m a biological woman in every cell in my body,” she said, adding that a man who had legally transitioned was “not the same as me”.
Ms Badenoch, who took over as equalities minister in 2020, said she found her account “difficult” to accept as the policy that was being pushed at that time was self-identification.
“So, I don’t understand how that would have changed unless someone else did it in between,” she said.
“I didn’t work with Penny, but my understanding was that the previous minister who had done the role had wanted self-ID, and that was something that I reversed with Liz.”
Ms Mordaunt retorted, saying: “That is not correct and this will all be on record in Government.”
Ms Badenoch replied: “It is on record.”
She was backed by Ms Truss, who also has responsibility for equalities alongside foreign policy, who also said there hade been a plan to move forward on self-identification,
“What I did is I changed the outcome of that work so that we were able to make the process simpler and kinder, but not move ahead with self-ID, which I think is the right position,” she said.
Ms Mordaunt then came under fire from Rishi Sunak after she said her economic platform was not based on “tax and spend” but on “growth and competition”.
The former chancellor said the campaign promises she had made to cut VAT on fuel and raise income tax thresholds would cost £15 billion.
“Even the pledges you’ve made are double-digit billion pound promises,” he told her.
“The best way to help everyone, the best way to make sure that they have money in their pocket, is to get a grip of inflation, and that should be everybody’s priority because that’s the thing that’s going to erode everyone’s living standards.”
Ms Mordaunt replied: “Two things, Rishi, that you haven’t realised – that is, I know you know people are going to need more help this autumn, but actually people need help now and you are going to have to do something on taxation.
“Next April we are going to be one of the most uncompetitive nations in terms of our tax competitiveness. That cannot be allowed to happen.”
Mr Sunak, who topped the first two polls, also attacked Ms Truss – who his also promising tax cuts – after she pinned the blame for rising inflation on the Bank of England.
“I don’t think the responsible thing to do right now is launch into some unfunded spree of borrowing and more debt, that will just make inflation worse, it will make the problem longer,” he said.
“Borrowing your way out of inflation isn’t a plan, it’s a fairytale.”
Ms Truss responded: “I think it is wrong to put taxes up.”
Earlier, Tom Tugendhat sought to make a virtue of the fact that he was the only candidate in the race without ministerial experience.
“We need a break from the Johnson years. That is why I am here. We need to make sure we can trust our politicians,” he said.
He drew applause from the audience when – alone among the candidates – he answered the question was Boris Johnson an “honest man” with the single word answer “No”.