Rishi Sunak pledges £17bn in tax cuts to revive Tory election bid

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Rishi Sunak has pledged more than £17bn in tax cuts in a bid to revive his stalled election campaign, but his Conservative manifesto was attacked by some on the Tory right for being too timid.

The Conservative leader insisted that his 76-page policy plan was “bold” as he promised help for “white van” entrepreneurs, pensioners and first-time homebuyers, mainly funded by a big crackdown on welfare.

But one former Tory cabinet minister said Sunak had not done enough to defend the party’s right flank from the threat of Nigel Farage’s Reform UK: “I think everyone is fairly underwhelmed and expected something more.

“There’s no boldness, nothing that fires the imagination and nothing frankly that is going to induce people to vote Conservative,” they added.

Some economists also questioned whether Sunak’s sums added up. “Those are definite giveaways paid for by uncertain, unspecific and apparently victimless savings. Forgive a degree of scepticism,” said Paul Johnson of the Institute for Fiscal Studies think-tank.

Sunak, launching the prospectus at the Silverstone motor racing circuit on Tuesday, offered a surprise tax cut for small traders as he tried to reverse polls showing the Tories heading for a heavy defeat.

Sunak promised 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. Tory officials said the move would help “brickies, sparkies, chippies and cabbies”.

He also put a promise of a further 2p cut to national insurance contributions 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 because of a freeze on thresholds and allowances.

Much of the manifesto, including a revival of national service and a pledge to protect state pensioners from paying tax, had been trailed and one Tory insider on the moderate wing of the party bemoaned the absence of a “big rabbit out of the hat”.

Sunak claimed the policies were fully funded and that the Tories would cut £12bn from the welfare bill by 2030.

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.

Sunak 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”.

Sunak admitted on Monday that buying a home had become more difficult under his government and vowed to act, including by permanently abolishing stamp duty for first-time buyers on homes worth less than £425,000 at a cost to the government of £590mn.

The Conservatives promised to press ahead with the Rwanda asylum policy and cap legal migration, but Sunak pulled back from a direct commitment to pull out of the European Convention on 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 Farage, who narrowly escaped a plane crash in 2010 in nearby Hinton-in-the-Hedges and has menaced the Conservatives ever since.

Labour leader Sir Keir Starmer took the unusual step of criticising Sunak’s manifesto by comparing it with the leftwing tract Labour produced at the 2019 general election — and on which he stood as a candidate.

“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.

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