Rishi Sunak prepares a massive ‘u-turn’ on tax: Former Chancellor is now set to unveil the ‘biggest income tax cut’ since Margaret Thatcher… but not for another seven years
- Ex-chancellor has pledged the ‘biggest income tax cut’ since the Thatcher years
- Mr Sunak’s campaign has faltered as Liz Truss wins support for low-tax cache
- Polls suggest she has a clear lead, with Sunak anxiously trying to close the gap
- He had already supported 1p cut off basic rate – but has raised plan to 4p off
Rishi Sunak today unveils a ‘radical’ plan to slash 4p off income tax by the end of the decade in a last-ditch attempt to win over Tory members.
The former chancellor said he is pledging the ‘biggest income tax cut’ since Margaret Thatcher.
The move was last night branded a ‘U-turn’ by a Liz Truss campaign source, who said: ‘People need tax cuts in seven weeks not seven years.’
Mr Sunak’s campaign has faltered over the last few weeks, while Miss Truss has won support for her low-tax credentials and promise to reverse the national insurance hike.
With polls suggesting that she has a clear lead, Mr Sunak is anxiously trying to close the gap before Tory members cast their ballots.
Rishi Sunak is pictured celebrating the Lionesses’ victory in the Euro 2022 final at Wembley
Mr Sunak has already pledged to take 1p off the basic rate of income tax by 2024, but has now promised to go further by the end of the next Parliament by slashing a further 3p. His campaign team estimates that every subsequent penny off income tax will cost around £6 billion a year.
The move – funded from additional tax receipts generated by forecast economic growth – would see the basic rate of income tax fall from 20p in the pound to 16p by December 2029 at the latest.
Mr Sunak said: ‘What I’m putting to people today is a vision to deliver the biggest income tax cut since Margaret Thatcher’s government. It is a radical vision but also a realistic one, and there are some core principles that I’m simply not prepared to compromise on, whatever the prize.
‘Firstly I will never get taxes down in a way that just puts inflation up. Secondly I will never make promises I can’t pay for. And thirdly I will always be honest about the challenges we face.
Liz Truss is pictured alongside football legends and special guests at the Euros final yesterday
‘Because winning this leadership contest without levelling with people about what lies ahead would not only be dishonest – it would be an act of self-sabotage that condemns us to defeat at the next general election.’
But a Truss campaign source accused Mr Sunak of offering ‘jam tomorrow’. They said: ‘It’s welcome that Rishi has performed another U-turn on cutting tax, it’s only a shame he didn’t do this as chancellor when he repeatedly raised taxes. The public and Conservative Party members can see through these flip-flops.’
Simon Clarke, chief secretary to the Treasury, added: ‘We cannot afford to wait to help families, they need support now. Liz will cut taxes in seven weeks, not seven years.’
Voting papers will land on doorsteps from today – with many members likely to return their ballots long before the September 2 deadline.
The result will be announced on September 5 and the winner is expected to replace Boris Johnson as prime minister the following day.
Yesterday, Mr Sunak also pledged to introduce £10 fines for patients who fail to show up for NHS appointments. The Tory leadership hopeful said the policy would be in place until the NHS backlogs are reduced to manageable levels.
Patients would be given the benefit of the doubt the first time they miss an appointment. But they would be charged £10 for failing to attend any subsequent appointments without providing sufficient notice.
Allies of Mr Sunak stressed that GPs and hospital trusts would be able to use their own discretion in exceptional circumstances to decide not to issue the fine.
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