Rishi Sunak has said he will cut the basic rate of income tax from 20% to 16% if he becomes prime minister.
This would amount to a 20% tax reduction, what he describes as the “largest cut to income tax in 30 years”.
Speaking on the BBC Radio 4 ‘Today’ programme this morning, the former Chancellor Rishi Sunak said, “As prime minister I want to cut income tax at the basic rate by a fifth to 16p, but I want to do that in a way that is responsible, I want to make sure that we can pay for it, I want to make sure that we can do it alongside growing the economy, so that is the vision that I have”.
But supporters of his rival Liz Truss have accused the former chancellor of being indecisive and flip-flopping on his policies.
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Chancellor Nadhim Zahawi is backing Truss and suggested she has a ‘booster’ economic approach to Sunak’s ‘doomster’ attitude. Writing in The Telegraph today, the Chancellor says she will “overturn the economic orthodoxy” to turbocharge growth, labelling her a “booster” next to Sunak’s “doomster.” Tom Tugendhat has also passed his support to Truss, saying that her economic plan has “true Conservative principles”.
In a further critique of Sunak’s approach, current Chief Secretary to Treasury, Simon Clarke, says “We cannot afford to wait to help families, they need support now. Liz will cut taxes in seven weeks, not seven years.”
Attempting to emphasise the difference between himself and fellow challenger Liz Truss, Mr Sunak said of his plan, “It is entirely different to doing things right now, which would make things worse, and which would endanger people’s mortgages”.
Continuing he said, “I don’t think embarking on a spree of excessive borrowing at a time when inflation and interest rates are already on the rise, would be wise. I think that everyone gets that is a point of differentiation between us [him and Liz Truss]. But we need to also look beyond that, and that is why I want to give people a sense of what I would like to take the economy when we grip inflation”.
Writing on Twitter, the former Conservative Cabinet Minister, John Redwood said, “Rishi’s last tax flip flop did not work. So now he tries a bigger flop flop. The problem is with his record of massive tax rises when in power, many people do not believe him when he says he is now a tax cutter”.
Challenged that he was only announcing his proposed tax cut because he is behind in the current Conservative leadership race, Mr Sunak responded, “No, this is entirely consistent with what I have been saying for a long time, that is why as Chancellor, I set out a plan to cut income tax in this parliament already”.
Expanding his comments on taxation to cover corporation tax, Mr Sunak said, “It is my opponent in this contest who wants to stick with the orthodoxy of having ultra low corporation tax rates, and you know what, they don’t work in increasing business investment in this country. We have tried it for a decade, it hasn’t raised growth, it hasn’t improved business investment, it hasn’t improved business innovation in R&D”
Last night, Liz Truss was watching England’s women take their football victory at Wembley alongside Culture Secretary Nadine Dorries and campaign manager Thérèse Coffey.
Tonight there will be more Conservative hustings in Exeter in front of party members between Truss and Sunak. Before that, Truss will be touring Devon, including a stop at a farm, while Sunak has appointments in North Dorset, Taunton Deane and East Devon before hitting Exeter.