Chancellor Rishi Sunak has revealed that the Conservative manifesto will include proposals for tax cuts. Speaking ahead of the launch of the party’s manifesto, Sunak told the BBC that the plans would be “fully funded and costed”. He also promised that day-to-day government spending on public services would continue to increase ahead of inflation under a future Tory government. However, Sunak acknowledged that individual departments could still face cuts.
The Conservative Party has previously announced plans to reduce National Insurance by 2p for 27 million workers, with a long-term ambition to abolish it completely. The party’s manifesto is expected to confirm that stamp duty for first-time buyers of properties costing up to £425,000 will be abolished, however, no changes to inheritance tax are anticipated.
Both the Conservatives and the Labour Party have ruled out increasing income tax, National Insurance or VAT. But both have also said income tax thresholds will remain frozen until 2028, possibly leading to an increase in the number of people paying higher-rate tax if their wages rise. Sunak stated that his party’s policies would be paid for by clamping down on tax avoidance, raising £6 billion, as well as welfare reform and getting more people into employment.
In response, the independent Institute for Fiscal Studies has said that delivering the £12 billion savings promised by the Tories by 2030 through welfare reform would be difficult to achieve. The think-tank has warned that whoever wins the next election will either need to reduce the scope of what the state provides or increase taxes to maintain levels of departmental spending. Sunak argued that his party would focus on increasing productivity in the public sector, and cuts to taxes could be achieved if productivity levels can return to pre-pandemic levels.
Sunak was also questioned over the Conservative’s record on housing and whether owning a home had become more challenging on their watch. He admitted that it had, but pledged to build homes in the correct places while ensuring that local communities are treated sensitively. Additionally, he affirmed that increasing taxes on young people would make it harder for them to buy a home, and that he wanted people to “keep more of their money”.
Sunak’s interview with the BBC forms part of the media outlet’s coverage of the upcoming election. The Panorama Interviews with Nick Robinson will feature all the major party leaders in the run-up to the election
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