Ione Wells
Political Correspondent, BBC News

Rishi Sunak isn’t the frontrunner in Tory member polls at the moment – and as a result has more to gain than lose.

Truss’s allies are not happy that he’s interrupted her to challenge her tax cut plans - with one source close to her saying she “can’t get a word in edgeways”.

Despite both sides saying beforehand they wanted to clean up some of the "blue-on-blue" attacks, both are not shying away from laying into each other’s plans.

Sunak repeats a soundbite we are going to hear a lot of in this campaign - that if the Conservatives are not for sound money, what are they for?

His team here highlights that the Institute for Fiscal Studies has said Truss’s tax cuts could “further increase inflationary pressures”, though this would vary depending on the specific package.

Meanwhile Liz Truss says she will “act immediately” with tax cuts.

George Bowden
Reporting from the debate

Dominic Raab sighs loudly in the spin room when our political editor Chris Mason brandishes a copy of the book Britannia Unchained.

"Anybody else have a copy?" Newscast host Adam Fleming wonders aloud.

Image source, .

The BBC's Political Editor Chris Mason says in a book Liz Truss co-wrote, called Britannia Unchained, British workers were described as "amongst the worst idlers in the world, we work among the lowest hours, we retire early, our productivity is poor".

"Every author wrote a different chapter, I wrote the chapter on education" she says - and she claims the section in question was written by Dominic Raab, who is supporting Rishi Sunak.

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Here's the first question from the BBC's Political Editor Chris Mason.

He asks if Rishi Sunak thinks the public can expect tax cuts from a Sunak government after he put up taxes as chancellor.

Sunak says he "was also the chancellor during Covid" and the NHS still needs to get backlogs down.

"I am going to deliver tax cuts" in areas such as business investment, he says, and "for working people".

He says he has a plan, which is paid for, where income tax will be cut - but only "when the time is right".

Reality Check

Talking about the possibility of government borrowing rising under her policies, Liz Truss said: "Countries like the US, Canada, and Japan, all have higher levels of debt than the UK, but they are not following the policies that will lead to a recession. We are an outlier."

She has previously specified that she is talking about debt per person when making that comparison.

At the end of 2021, UK government debt stood at £2.4 trillion. That translates to roughly £38,000 per person in the UK. Of the G7 countries, the UK's government debt is the second lowest behind Germany at roughly £30,000 per person. Japan has the highest government debt per person at £86,000, for the United States it's £71,000 and for Canada £49,000. Since 2010, government debt per person in the UK has increased from around £24,000 to £38,000 in 2021.

But Sunak hits back - and claims Truss's plans would lead to a "short term sugar rush" of unfunded tax cuts.

He adds this would be followed by the "crash of higher prices and higher mortgages rates".

In response, Truss asks Sunak "how on Earth" he can claim the highest taxes for 70 years would drive economic growth.

Liz Truss accuses Rishi Sunak of raising taxes to their highest level for 70 years while chancellor.

"Raising taxes prevents growth," Truss claims.

You can see below how the tax burden has risen - and is forecast to rise further.

Image source, .

George Bowden
Reporting from the debate

There are gasps in the spin room and even an "ooomph" from Sunak's supporters as he points out - again - Truss's Remainer background.

In 2016, Sunak voted Leave in the Brexit referendum while Truss voted Remain.

She has since said she's changed her mind and is committed to making Brexit a success.

Sunak attacks Truss's plans to cut taxes immediately, saying this will fuel inflation and cause far more problems in the long-term.

He quotes an economist supporting Truss, who, says Sunak, has forecast interest rates of up to 7%.

The former chancellor says this will cost households across the country thousands of pounds more a year, as it will lead to mortgage rises.

Ione Wells
Political Correspondent, BBC News

Image source, .

The talking over each other - and over, and over - shows just how much their differing tax policies are going to be the key battleground in this contest.

Will Tory members buy Sunak’s plan to lower inflation before cutting taxes - or Truss's to "act immediately" and reverse tax rises?

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And here's the first argument.

Former chancellor Rishi Sunak says it is not "responsible" to put Covid debts on the country's "credit card", and the decision was made to "protect the economy" and the NHS.

Sunak then interrupts Liz Truss on her tax plans, after she says she plans to start paying back Covid debt in three years' time.

She says putting up taxes will "lead to a recession" because of a contraction in economic growth.

Sunak interrupts her again, and says inflation "is the single biggest thing" that British households are having to deal with, and if taxes are cut, inflation could rise further.

He says her plans will lead to £40bn more in borrowing.

In her first answer, Liz Truss says she would act immediately, adding she understands people are struggling with some of the worst cost of living rises in generations.

She repeats her plans to reverse April's national insurance increase of 1.25p in the pound, adding the Tory party had promised not to raise it at the 2019 general election.

Truss adds she would also introduce a "temporary moratorium" on the green levy - saving households £153 on average a year - as this would cut people's rising fuel bills.

She also says she would "put in place a growth plan" for the economy as the only way to pay back debt, solve the current economic issues the UK is facing, and "take advantage of post Brexit growth opportunities".

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Rishi Sunak fields tonight’s first question – on the cost of living.

He reminds the audience of his record as chancellor – saying he offered “significant support” to help people pay for their energy bills in the autumn and winter.

Sunak says long-term solutions are needed as well – saying there are “homes we can better insulate”.

He also says there is a need for “more homegrown energy” produced in the UK.

Image source, .

Ione Wells
Reporting from the debate

One campaign aide has just described this as "like watching England in a penalty shootout".

After the initial excitement and hum in the room, it's all gone very quiet as people prepare to see Truss and Sunak go head-to-head.

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It's 9pm, and Our Next Prime Minister is starting now on BBC One, the BBC News Channel and BBC Radio 5 Live.

You can also watch the BBC News Channel coverage of the debate using the player at the top of this page. The stream will also work for international viewers.

Do stay with us here for continuous updates and analysis as the programme unfolds.

Image source, PA Media

Here's a look at some policies Rishi Sunak has pledged if he were to become leader of the Conservative Party and PM:

• Promises to reduce taxes “once we’ve gripped inflation”
• Pledges to cut income tax before the end of the next Parliament, and plans "radical reform" to business taxes
• Promises to focus on employment by making sure people have the skills they need for better paid jobs

• Says he will honour the goal of reaching net zero by 2050

• Campaigned for Brexit and is committed to reforming all EU laws and bureaucracy that are still in place, by the time of the next general election
• Promises to accelerate NHS targets to cut waiting lists, eliminating one-year waiting times by September 2024 and getting overall numbers falling by next year
• Backs the continuation of existing grammar schools but has not said whether he would allow new ones

Read more on the candidates' policies here

Image source, PA Media

Either Foreign Secretary Liz Truss or former Chancellor Rishi Sunak will be named Conservative Party leader and prime minister in September, after a vote among Tory party members.

Here's a reminder of some of the policies Truss has set out so far:

• Says she will reverse the national insurance rise, which came into effect in April
• Pledges to scrap a planned rise in corporation tax - set to increase from 19% to 25% in 2023
• Would suspend what is known as the “green levy” - part of your energy bill that pays for social and green projects, which costs roughly £153 a year
• Says she will honour the goal of reaching net zero by 2050
• Argues she can be trusted with Brexit despite voting Remain in the 2016 referendum
• Says GP services need to be more accessible in order to reduce the pressures on hospital services
• Pledges to give every child “the best opportunity to succeed” wherever they are from and whatever their background

Killer blows and awkward moments – why tonight matterspublished at 20:49 British Summer Time 25 July 2022

20:49 BST 25 July 2022

Ione Wells
Reporting from the debate

Only about 160,000 Tory members will have a say on who the party’s next leader – and our next prime minister – is.

So why do Rishi Sunak and Liz Truss’s performances tonight, in front of a national audience, matter?

Firstly, their killer blows and squirmiest moments will form the headlines and clips that members see ahead of casting their ballots – which, for those voting early, could be in days.

Debates reveal the candidates’ strengths and weaknesses - as well as what the public make of them. Stoke’s constituencies are exactly the sort of seats the Tories need to hold if they are to win the next election.

But the Tory party’s future is at stake here too. We’ve seen months of infighting, disunity, briefing and counter-briefing among Tory MPs and ministers.

A key frustration among many ministers who resigned from Boris Johnson’s government was that they felt they spent too much time on the airwaves talking about themselves, rather than actual policies. Precious parliamentary time was taken up debating things like Partygate fines.

The “blue-on-blue” attacks in this campaign - from Team Sunak accusing Truss of “fairytale economics” to Team Truss alleging Sunak’s migration plans could breach international law - have made some Tory MPs deeply uncomfortable.

Whoever wins the leadership will have to show they can reunite the party after a fractious period, and focus on looking out, not in.

Let’s see how that plays out tonight on the debate room floor.

The main presenter will be Sophie Raworth, who has been the newsreader on BBC News' main bulletins for over a decade, as well as presenting the Sunday Morning political programme in recent months.

Assisting her with follow up questions and analysis of the answers will be our political editor Chris Mason and economics editor Faisal Islam.

Chris has been covering Westminster for many years as a reporter, and was one of the hosts of the Newscast (formerly Brexitcast) podcast and BBC Radio 4's Any Questions. He was recently appointed to his new role as the successor to Laura Kuenssberg.

Faisal has been covering economics, business and politics in the UK for more than two decades, working for a variety of broadcast and print media - including as Sky News' political editor - before joining the BBC as economics editor in 2019.

Reality Check

Expect Foreign Secretary Liz Truss to claim success for securing dozens of post-Brexit trade deals for the UK in the debate.

Is she right?

The UK has secured trade agreements with more than 60 countries since the Brexit vote. However, the vast majority are "rollover" deals - copying the terms of deals the UK already had when it was an EU member, rather than creating new benefits.

The UK has negotiated two new deals from scratch – with Australia and New Zealand. The government’s own estimate says the Australia deal could increase the UK's GDP by just 0.08% over 15 years, external.

More on this here.