Sunak prioritises curbing inflation over tax cuts, dodges specifics on pre-election tax reduction
Prime Minister Rishi Sunak, in a recent BBC interview, expressed his desire for tax cuts, though refrained from committing to any before the forthcoming general election. The statement came amidst pressures faced on the initial day of the Conservative Party conference, with growing disquiet among Tory MPs regarding tax and HS2 issues. Cabinet Minister Michael Gove, too, voiced his support for pre-election tax cuts. This unfolds in a scenario where the UK tax levels, as per the Institute for Fiscal Studies, are at a 70-year high, with little likelihood of a reduction in the near future.
Sunak emphasised that easing living costs by halving inflation by year-end is his major focus, terming it the “best tax cut” achievable. The government’s target is to reduce the inflation rate, which stood at 10.7% during the last quarter of 2022, to 5.3%. This is seen as a pivotal step to alleviate the financial strain on citizens, given the limited tools at the government’s disposal to combat inflation. While the Bank of England suggests interest rate hikes as a viable solution, Sunak’s emphasis is on long-term measures to enhance living standards.
The Prime Minister, brushing off discontent within his party over tax, green policies, and the HS2 rail project, rejected allegations of the Tories drifting from the electorate, even as they trail Labour in polls. Ahead of the conference, Sunak pledged £1.1 billion for towns deemed “overlooked” by the government, but abstained from commenting on the speculated truncation of the Birmingham-to-Manchester leg of HS2, amidst concerns of escalating project costs potentially surpassing £100 billion.
Sunak’s tenure, marked by a cautious approach since his ascension as Conservative leader and PM a year ago, seems to be veering towards more decisive, albeit controversial, stances. Recent policy shifts include a moderation of green policies aimed at achieving net zero emissions by 2050, hinting at a pragmatic approach towards balancing economic concerns with environmental commitments. These strategic moves come as Sunak aims to delineate clear distinctions between the Tories and Labour, striving to overturn the pessimistic election outlook among some Conservative MPs.
As Sunak steps into a proactive role of a “change” prime minister, the upcoming days of the party’s conference are anticipated to reveal more about his vision for the future, and possibly, more clarity on the contentious tax cut issue as the general election looms. Source