LONDON (AFP) - Conservative leadership candidate Rishi Sunak wants to tackle surging inflation and Britain's pandemic debts. Rival Liz Truss wants immediate tax cuts.
The economy will be a key battleground in the coming weeks, after Mr Sunak and Ms Truss emerged on Wednesday (July 20) as the runoff contenders to succeed Prime Minister Boris Johnson.
But they have other differences, notably over climate change:
Former finance minister Sunak is vowing to stick with a host of recent tax rises in a bid to balance the books following record government borrowing during the Covid-19 pandemic.
He has said curbing inflation, which is at a 40-year high, is his priority and criticised Ms Truss's "fairytale" plans on tax.
Foreign Secretary Truss has accused Mr Sunak of pulling Britain to the brink of recession, and vowed to "start cutting taxes from day one" including corporation tax paid by businesses.
She also wants to review the Bank of England's mandate to set interest rates.
Cost of living
As chancellor of the exchequer, Mr Sunak in May implemented a £15 billion (S$25 billion) package of support to help Britons through the worst cost-of-living crisis in decades.
However, his leadership rivals criticised it as insufficient, with energy prices set to surge anew in October.
Ms Truss has vowed to use economic growth fuelled by her promised tax cuts as the primary way to tackle the crisis.
Ms Truss backed remaining in the European Union in Britain's 2016 referendum, before becoming a zealous convert to the Brexit cause.
Since December, she has led negotiations with Brussels over subsequent frictions.
She is pushing new legislation that would unilaterally rewrite Britain's post-Brexit commitments to the EU over Northern Ireland, which opponents say breaches international law.
Mr Sunak, a rising Tory star in 2016, came out early for Brexit, to the despair of then leader David Cameron.
He has said he backs the controversial proposals on the "Northern Ireland Protocol" and, as chancellor, promoted "freeports" around Britain as one way of profiting from Brexit.
Under pressure to curb waves of migrants crossing the Channel from France, the Conservative government has been pushing a plan to send asylum seekers to Rwanda for processing and resettlement.
The policy, which has been stalled by legal action, is backed by both the candidates. Ms Truss has called it "completely moral".
But Mr Sunak has faced anonymous briefings to newspapers claiming he opposed it in Cabinet over its £120 million costs.
Mr Sunak has declined to set "arbitrary targets" on military spending following the war in Ukraine.
But he views Nato's target - for member states to spend 2.0 per cent of gross domestic product (GDP) on defence - as a "floor and not a ceiling".
He wants Britain's defence budget to rise to 2.5 per cent of GDP "over time". Ms Truss has been more forthright, this week committing to spending 3.0 per cent by 2030.
Mr Sunak has vowed to stick with Britain's legally binding targets to reduce carbon emissions to net zero by 2050.
He would maintain "green levies" on energy bills earmarked to help the renewable sector grow.
Ms Truss has vowed to scrap the levies, but says she is committed to the 2050 target.