Rishi Sunak, who is trailing in the race to become Britain’s next prime minister, has promised to cut the basic rate of income tax by 20 percent by 2029, potentially a roll of the dice from the former finance minister.Sunak, once seen as the front-runner to replace Boris Johnson as he helped steer the economy through the devastating effects of the Covid-19 pandemic, has been up against his rival, Foreign Secretary Liz Truss, who has promised immediate tax cuts.
The bruising race between Sunak and Truss to become Britain’s next prime minister accelerated on Monday (August 1) with ballots being sent out to Tory members.Sunak said he remained focused on tackling inflation, but once that was achieved, he would follow the already announced plan to cut income tax by 1 pence (S$16.90) in 2024 and then cut another 3 pence by the end of the year. next parliament, probably around 2029.
The two commitments would raise income tax from 20p to 16p.Sunak said the plan would mean the biggest income tax cut since Margaret Thatcher.”It’s a radical vision, but it’s also realistic,” he said in a statement on Sunday (31 July).Britain’s hunt for a new prime minister was launched on July 7 when Johnson was forced to announce his resignation after months of scandal. Conservative lawmakers have narrowed the field of candidates to Truss and Sunak, with a decision by party members expected to be announced on September 5.
With inflation rising to a 40-year high of 9.4 percent and stagnant growth, the economy dominated the early stages of the contest. Sunak, who has steered Britain’s economy through the pandemic, said Truss’s plans were “fantasy economics” that would fuel inflation and pile further pressure on public finances struggling to recover from the pandemic. Sunak said each penny cut from the income tax rate would cost around £6 billion (S$10.1 billion) a year, a figure he said would still allow Britain’s debt-to-GDP ratio to fall if the economy grows in line with official forecasts.
Truss argued that tax cuts were needed now to give the economy a shot. A recent YouGov poll showed Truss leading Conservative Party members by 24 points over Sunak.bSunak, who has been trailing in the polls for all major party members, made a major U-turn last week when he announced a plan to scrap VAT on energy bills.
He also promised the People’s Conservatives at the weekend that he would stop “fostering nonsense” and “end the brainwashing” if he became prime minister, although he added he had “zero interest in fighting the so-called culture war”.The 42-year-old also unveiled plans to revive the country’s ailing town centres.” By 2025, I want to reduce the number of empty shops and ensure they become thriving local assets,” he said. “I will also crack down on anti-social behaviour, graffiti and littering – through enhanced police powers and increased fines.”
