The former chancellor accused Ms. Truss of peddling “something-for-nothing” economics after she said he was slowing growth by raising taxes to the highest level in 70 years.
And after Ms Mordaunt said she wouldn’t abide by his rule of borrowing only to invest, he said even former Labor leader Jeremy Corbyn was not in favor of such tax easing.
After being criticized for a poor performance during the first debate, Ms Truss immediately went on the offensive in the second meeting, hosted by ITV, by attacking Mr Sunak’s record in the Treasury.
“Rishi, you have raised taxes to the highest level in 70 years. That will not stimulate economic growth,” she said.
“You increased national insurance, even though people like me in cabinet at the time were against it because we could have afforded to fund the NHS through general taxes.
“The fact is that raising taxes right now will slow economic growth; it will prevent us from getting the income we need to pay off the debt.”
Mr Sunak said the pandemic has damaged the economy and public finances need to be rebuilt.
“I’d like to stand here and say, ‘Look, I’ll cut this tax, that tax, and another tax, and it’ll be all right.’ But you know what? It won’t,” he said.
“There is a cost to these things and the cost of higher inflation, higher mortgage rates, eroded savings. And you know what? This something-for-nothing economy is not conservative. It’s socialism.”
Ms Mordaunt said the limited tax cuts she advocated were not inflationary and people now need help with the cost of living.
“I don’t understand why Rishi doesn’t understand that,” she said.
Mr Sunak said, “It is one thing to borrow for long-term investment. It is quite another to put the daily bills on the country’s credit card. Not only is it wrong, it is also dangerous.
“Even Jeremy Corbyn didn’t go that far.”
Mr Sunak added: “If we’re not for sound money, what’s the point of the Conservative Party?”
There were further ill-tempered exchanges between Ms. Mordaunt and Kemi Badenoch – who in the first debate had accused Ms. Mordaunt of pushing a gender self-identification policy for people who wanted to legally change their gender when they assumed government responsibility for had the issue.
After further press reports cast doubt on her denials, Ms Mordaunt said: “I know why this is being done, but I would say any attempts to portray me as a licentious person will fail.”
Mrs. Badenoch tried to interrupt repeatedly, saying, “Penny, I was just telling the truth. I’m telling the truth.”
Ms Truss also denied that she ran a negative campaign after attacks on Mr Sunak by some of her supporters who accused him of overthrowing Boris Johnson.
“I certainly don’t believe in those kinds of campaigns. It’s not the kind of campaign I’m fighting. I’m fighting for a positive campaign about the future,” she said.
The debate took place ahead of the third ballot by MPs on Monday, with one more candidate to be eliminated, leaving only four.
Tom Tugendhat, who finished fifth in the second round, tried to make some virtue of being the only one of the remaining contenders not to have served in government.
He said those who were ministers under Boris Johnson “gave credibility to the chaos”, making it difficult for Conservatives to win the next general election.
“Whatever your responsibilities in that government, whatever your place in that government, in two years Keir Starmer will hold that record against us,” he said.
“We need to make sure we win conservative seats across the country, and even really good people give credibility to the chaos candidate.”
Ms Badenoch said she was “not ashamed of anything we did” while in government and that they had “a lot to be proud of”.
“It’s not easy to serve in government. It requires making difficult decisions. Tom has never done that. It’s very easy for him to criticize what we’ve done, but we’ve been on the front lines defending the case,” she said.
Mr Tugendhat replied that as a former army officer he had been on the front lines in Afghanistan and Iraq, leading “the argument against Putin and China”.
She replied, “You haven’t made any decisions, talking is easy.”
But asked by presenter Julie Etchingham to raise their hands if they would give Mr Johnson a job in their government if he was willing to serve, none of them did.