Liz Truss set to reignite China row in fresh challenge to Rishi Sunak

Grant Shapps, the Business Secretary, said Ms Truss had been “right” to want lower taxes but insisted her economic approach had “clearly” misfired.

Mr Shapps told Sky News: “I completely agree with Liz’s instinct to have a lower tax economy. 

“We also know that if you do that before you’ve dealt with inflation and dealt with the debt, then you end up in difficulty. You can’t get the growth out of nowhere.”

Labour and the Liberal Democrats were also critical of the intervention, with the latter calling in a press release for Ms Truss to lose her £115,000 annual post-premiership allowance.

Ms Truss’s intervention comes amid an emerging Tory civil war on the issue of taxation, specifically when and how to lower the tax burden.

Her tax-slashing mini-Budget was followed by a sinking pound and soaring interest rates for long-term government debt, as markets lost confidence in her approach.

But a band of Tory MPs believe tax cuts to stimulate economic growth continue to have merits, especially as inflation appears to have peaked and a recession is looming.

The Telegraph understands that the newly created group of pro-Truss loyalists, the Conservative Growth Group, intend to publish policy papers in the near future to force the Treasury’s hand.

Simon Clarke, who served as Ms Truss’s communities secretary and helped set up the new grouping, welcomed her intervention, saying it “poses important questions”.

Truss to speak on threat to Taiwan

After this week’s push defending her economic approach, Ms Truss’s next focus will be policy on China and the need to stand firm in the face of the country’s rising influence.

She will appear at the Inter-Parliamentary Alliance on China’s Tokyo Symposium alongside Scott Morrison, the former Australian prime minister, and Guy Verhofstadt, the former Belgian prime minister and European Parliament Brexit coordinator.

A promotion note for the event said the symposium would focus on “Beijing’s threats to Taiwan, its use of economic coercion, its growing long-arm policing and malign influence operations abroad, as well as its gross domestic human rights abuses”.

Ms Truss’s speech will address concerns about China’s approach to Taiwan, amid fears Beijing is considering a military invasion, and the need for an open and free Indo-Pacific.

During the summer, both Ms Truss and Mr Sunak talked tough on China in the Tory leadership contest. But since taking office, Mr Sunak has softened his rhetoric.

When the Prime Minister attended the G20 summit in Bali last November, he talked up the need to engage with Beijing – prompting a backlash from Tory China hawks.

On the trip, Mr Sunak was set to become the first UK leader to hold face-to-face talks with Xi Jinping, the Chinese president, for five years. However, the meeting was cancelled when diaries changed after a stray missile struck a Polish building just over the border from Ukraine.

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