Sunak defends focus on halving inflation amid Tory clamour for tax cuts
The Prime Minister suggested his approach is in line with ‘great Conservative governments’ of the past.
Rishi Sunak compared himself to Margaret Thatcher as he resisted calls from Tories to commit to tax cuts in a pre-election giveaway.
The Prime Minister vowed to prioritise measures to reduce inflation rather than taxes, insisting his is a “deeply Conservative” approach.
Cabinet minister Michael Gove on Sunday called for taxes to be cut before the next election, while former prime minister Liz Truss is among dozens of Tory MPs who have said they will refuse to vote for new tax rises.
Mr Sunak said “we’re all Conservatives, of course we want to cut taxes”, but he insisted: “The best tax cut, though, that I can deliver right now for the country is to halve inflation.”
It is a “deeply Conservative approach”, he said, adding “this is what Margaret Thatcher did, this is what Nigel Lawson did”.
He added: “This is in the tradition of great Conservative governments, bringing inflation down, because that’s the bedrock on which you build a strong economy. And that is the best way to help people with the cost of living.”
Despite Mr Sunak’s claims about Mrs Thatcher, income tax was slashed in the first Budget of her administration, although VAT was increased.
The issue of tax cuts, and the timing of any announcements, is likely to feature heavily over the coming days at the Tory conference in Manchester.
Levelling Up Secretary Mr Gove said he wants cuts announced before the election expected in 2024 to ease the tax burden on working households.
Mr Gove told Sunday Morning With Trevor Phillips on Sky News: “Of course it is the case that taxes are higher than we would want them to be. That is a fact.
“It’s one that I believe is due principally to the pandemic but also to an extent to the war in Ukraine.
“I would like to see the tax burden reduced before the next election.”
Although Jeremy Hunt has played down the prospect of tax cuts in November’s Autumn Statement, the Chancellor is likely to have a Budget before the next election.
Mr Gove suggested the focus should be on cutting taxes on work such as income tax or national insurance – rather than to inheritance tax as is being reportedly considered.
“We should incentivise people to work harder, we should make sure they are better rewarded for the enterprise, the effort, the endeavour that they put in,” he said.
But Mr Sunak refused to give the commitment to a pre-election tax cut sought by Mr Gove.
The PM told the BBC’s Sunday with Laura Kuenssberg: “Change may be difficult, but I believe the country wants change, and I’m going to do things differently to bring about that change.
“You saw that last summer (during the Conservative leadership contest) when it came to this question, I said the most important priority we faced was to bring inflation down.
“It’s inflation that’s putting the prices of things up, inflation that’s making people feel poorer, the quicker we bring inflation down, the better it is, and that’s why it’s the right priority, and we are making good progress.”
Mr Sunak also refused to set out a decision on whether the HS2 rail project will ever reach Manchester, despite his party’s conference slogan being “Long term decisions for a brighter future”.
The Prime Minister declined to comment on “speculation” as Theresa May followed Boris Johnson and David Cameron to become the latest Conservative former premier to warn against axing the Northern leg.
Andy Street, the Tory mayor of the West Midlands, is among the critics of HS2 not being extended past Birmingham, while London Mayor Sadiq Khan warned it could make the UK a “laughing stock” as it may never reach central London, instead stopping in a western suburb.
But Mr Sunak faced down his critics, telling Kuenssberg: “I’d completely reject that.”
The Prime Minister was instead keen to discuss his plans to combat what he terms as a “war on motorists” by issuing stronger guidance on 20mph zones and low traffic neighbourhoods.
He suggested to the BBC that local councils could still introduce low-speed areas if the move commands local “consent” and follows Government guidance.
The Conservatives have long trailed Labour in the polls by around 18 percentage points, but Tory members may be buoyed by an Opinion survey indicating a narrowing of the gap.
The poll of nearly 3,000 adults put the Tories 10 points behind – the closest since Mr Sunak entered Downing Street nearly a year ago – after he set out plans to water down environmental policies.
But the Prime Minister was dealt a blow on the eve of conference when Richard Walker, the executive chairman of Iceland supermarket, revealed he had quit the party.
Mr Walker, who had held ambitions of becoming a Tory MP, told BBC News: “It has become clear to me over recent months that the Conservative Party are drifting out of touch with the needs of business, with the environment, and also the everyday people that my business touches and serves.”