Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Rishi Sunak has pledged more than £17bn in tax cuts in an attempt to revive his stalled election campaign with a Conservative manifesto that also promised welfare reductions and help for entrepreneurs and first-time homebuyers.
The UK prime minister, launching the prospectus at the Silverstone racetrack, claimed the Tories still had fresh ideas and deserved to win a fifth successive election in spite of polls suggesting they were heading for a heavy defeat.
Sunak made a surprise promise to honour “the unique contribution of risk takers and entrepreneurs” by abolishing the main rate of self-employed national insurance in the next parliament at a cost of £2.6bn.
He also put a promise of a further 2p cut to national insurance for employees by April 2027 — a £10bn downpayment on his aspiration to scrap the tax — at the centre of his plan, entitled: “Clear Plan, Bold Action, Secure Future.”
The Tories have cut the NICs rate for employees from 12p to 8p in the past year, but the overall tax burden is set to rise in the next parliament, due to a freeze on thresholds and allowances.
Much of the contents of the manifesto, including a revival of national service and a pledge to protect state pensioners from paying tax, had been widely trailed.
Sunak claimed the policies were fully funded, and that the Tories would cut £12bn from the welfare bill by 2030. The Institute for Fiscal Studies has said the goal would be “difficult to the extreme” to achieve.
The manifesto said Sunak’s plan to cut £17.2bn a year in taxes by 2029-30 would be further funded by cracking down on tax avoidance and evasion. He said the welfare and avoidance measures would collectively raise £18bn.
The Tory leader insisted he could deliver spending cuts and tax cuts if re-elected on July 4: “We are the party of Margaret Thatcher and Nigel Lawson, a party, unlike Labour, that believes in sound money,” he said.
The manifesto also promises “to ease the burden of business rates for high street, leisure and hospitality businesses by increasing the multiplier on distribution warehouses that support online shopping”.
The prime minister admitted on Monday that buying a home had become more difficult under his government and vowed to act, including permanently abolishing stamp duty for first-time buyers on homes worth less than £425,000, costing £590mn.
The party promised to press ahead with its Rwanda asylum policy and cap legal migration, but Sunak pulled back from a direct commitment to pull out of the European Convention of Human Rights, as some Tories wanted.
“If we are forced to choose between our security and the jurisdiction of a foreign court, including the ECHR, we will always choose our security,” the manifesto said, echoing Sunak’s previous language.
Sunak launched the Conservative 76-page manifesto at the home of the British Grand Prix, hoping to inject into his election campaign the spirit of the racetrack’s motto: “Revved up and raring to go.”
But with the Tories trailing Labour by 20 points in opinion polls, some Conservatives fear the manifesto may lack the policy punch they believe is required to turn around the party’s fortunes.
Some Tories wanted more “red meat” to fend off the challenge posed by Reform UK leader Nigel Farage, who narrowly escaped a plane crash in 2010 in nearby Hinton-in-the-Hedges and has menaced the Conservatives ever since.
Sir Keir Starmer, Labour leader, took the unusual step of criticising Sunak’s manifesto by comparing it with the leftwing tract Labour produced at the 2019 general election.
“It’s a Jeremy Corbyn-style manifesto, which is to load everything into the wheelbarrow, don’t provide for funding and hope that nobody notices it is a recipe for five more years of chaos,” he said.
Starmer served in the leftwing leader’s shadow cabinet and supported his campaign for election, but now uses the Corbyn legacy as proof that he has “changed his party”.
Credit: Source link