Rishi Sunak's plan for '2p tax cut before the next general election', even if inflation drops slower than expected
4 June 2023, 10:13
Rishi Sunak is plotting a move to cut tax by up to 2p in the pound before the next election, expected in 2024.
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Ministers think that the cut, which could come to income tax or national insurance, would be possible even if inflation proves 'stickier' than expected.
The Prime Minister has said previously that he only wants to cut taxes once the economy is on a surer footing, and has pledged to halve inflation by the end of 2023.
Mr Sunak's Conservative party are lagging far behind Labour and Sir Keir Starmer in opinion polls.
Many in his party want him to cut taxes, despite growing demand for public services and increasing strain on the NHS.
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The 2p tax cut could "incentivise work" and help encourage more people to get back into jobs, the Telegraph reported.
"Cutting tax on working people is something he strongly believes in, a source told the paper.
"He wants to incentivise work, as you can see from what DWP [the Department for Work and Pensions] and the Treasury have been doing on getting people back to work."
The move would be based on the principle that "work is good for people and it’s good for the wider economy as well".
Mr Sunak is also considering a plan to follow the 2p tax cut with promises to cut income tax by 1p in each year of the next parliament.
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Ministers are also considering the idea of raising the thresholds at which workers start paying both income tax and National Insurance, although this is viewed as costly.
It comes after Chancellor Jeremy Hunt said in May that he agreed that taxes are too high, but said he would not start cutting immediately.
Mr Hunt said businesses were right to be worried about high taxes, but that his immediate priority was getting inflation down.
