Rishi Sunak's Tax-Cutting Promise Ahead of July 4 Election

British Prime Minister Rishi Sunak has pledged significant tax cuts and support for first-time homebuyers if he wins the upcoming July 4 election. Despite trailing Keir Starmer's Labour Party by roughly 20 points, Sunak emphasizes that the opposition would hinder economic recovery, positioning the Conservatives as better economic stewards.

Reuters | Updated: 11-06-2024 17:08 IST | Created: 11-06-2024 17:08 IST
Rishi Sunak's Tax-Cutting Promise Ahead of July 4 Election
Rishi Sunak

British Prime Minister Rishi Sunak pledged to cut billions of pounds of taxes and provide help for first-time homebuyers if he wins the July 4 election, launching one of the last throws of the dice for a leader badly lagging in the polls. With surveys showing the Conservatives consistently about 20 points behind Keir Starmer's Labour Party, Sunak has stepped up his argument that the opposition would derail the economic recovery and cannot be trusted in government.

Launching the party's manifesto, containing the policies it will pursue if it forms the next government, Sunak said he would lower payroll taxes and abolish the main rate for self-employed people by the end of the next parliament. "We will enable working people to keep more of the money that you earn because you have earned it and have the right to choose what you spend it on," Sunak said at the Formula One racetrack Silverstone in central England.

"We will ensure that we have lower welfare so that we can deliver lower taxes." Under the Conservatives' plans, taxes would be cut by 17.2 billion pounds a year by 2029/30, while welfare spending would be reduced by 12 billion pounds a year, and 6 billion pounds raised each year through tackling tax avoidance and evasion.

In the past, promises to cut the welfare bill by similar amounts - notably by former finance minister George Osborne in 2015 - failed to materialise. Sunak also promised to halve migration numbers, build more houses and provide financial support for first-time homebuyers.

LABOUR LEADS But so far, Sunak's message has failed to dent the Labour lead, with many voters asking why the party had not done more during its 14 years in power.

The Conservatives also now face a challenge from the right-wing Reform UK party, which, under the leadership of Brexit campaigner Nigel Farage, has vowed to lead a "revolt" against the Conservatives. Sunak has been on the back foot since he left D-Day commemorations in France early to give an election interview, angering veterans and prompting members of his own party to question his abilities. He has since repeatedly apologised.

Sunak has argued that after years of turmoil since the COVID pandemic and energy price spikes, the economy is at a turning point and starting to grow again, and says Labour would derail any recovery. As in previous elections, the Conservatives say that only they can be trusted to keep taxes low while Labour would need to hike rates to fund their promises, stalling economic growth.

But previous tax cuts have failed to move the dial for Sunak and polls show many voters want change and greater investment in public services. The public are still grappling with a 21% surge in shop prices in the last three years, and fallout from the chaotic tenure of Sunak's predecessor Liz Truss, whose economic policies led to higher borrowing costs and mortgage rate rises.

Labour has denied that it would put up taxes, ruling out any increase to the rates of income tax, national insurance, value-added or corporation tax. On Tuesday, the party's health policy chief also ruled out an increase in capital gains tax. ($1 = 0.7857 pounds)

(Writing by Elizabeth Piper and Kate Holton; additional reporting by William James, Sarah Young, Muvija M, Kylie MacLellan, Andy Bruce, William Schomberg and David Milliken; Editing by Jan Harvey and Bernadette Baum)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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