As the contest to succeed Boris Johnson heats up, candidates for the Conservative leadership have outlined rival tax-cutting strategies.
In a rush of announcements over the weekend, the majority of contenders have promised tax cuts for individuals, corporations, or both.
However, disagreements have emerged on the timing and magnitude of the anticipated reductions.
They also contrast with former chancellor Rishi Sunak, who has minimized the likelihood of immediate cuts.
Penny Mordaunt, the trade minister, is the seventh Conservative MP to enter the race.
The former defense secretary who supported Brexit launched her candidacy on Sunday, branding herself as pragmatic and a team player.
She joins a group of competitors that has grown dramatically in recent days, with the contest’s official schedule to be announced next week.
In addition to Mr. Sunak, his successor Nadhim Zahawi, the Secretary of Transport Grant Shapps, and previous health secretaries Sajid Javid and Jeremy Hunt have launched campaigns for the top position.
They join Attorney General Suella Braverman, former Minister of Equalities Kemi Badenoch, and backbencher Tom Tugendhat, with Foreign Secretary Liz Truss poised to launch her candidacy within the next 24 hours.
Tax reduction schemes
Mr. Javid has pledged extensive tax cuts, including the cancellation of next year’s anticipated increase in company tax from 19 percent to 25 percent, in favor of a progressive reduction of 1p every year to 15 percent.
In addition, he wants to push forward the 1p income tax cut scheduled for next year and reverse the April National Insurance increase he introduced as health minister to fund the NHS and social services.
On BBC’s Sunday Morning, he stated that these planned changes would cost £39 billion per year. In addition, he wishes to reduce fuel taxes.
He argued that the changes were necessary to stimulate economic growth in the United Kingdom and that not implementing them posed a “far larger risk.”
When asked how he would fund them, he stated that he would provide details in the following days, but cited official forecasts of a £30 billion “fiscal headroom” relative to spending plans by 2024.
Paul Johnson, the head of the Institute for Fiscal Studies, explained that the £30 billion number was derived at a time when inflation forecasts were lower.
Using the headroom to support tax cuts would “very probably” necessitate public-sector pay cutbacks or increased borrowing, he wrote on Twitter.
“Everyone desires lower tax rates. However, we must be transparent about the repercussions “he added.
Mr. Hunt, a former foreign and health secretary, has proposed an alternative strategy to decrease company tax to 15% in a single fall Budget.
If elected, he would also freeze for five years business rates, and a levy on commercial property, in the poorest districts.
And in another point of contention with Mr. Javid, he has stated that any income tax reduction should be contingent on generating economic development first.
He also disclosed that, if elected leader, he will appoint Tatton MP Esther McVey as his deputy prime minister. McVey formed the “blue-collar” group, which seeks to appeal to working-class voters.
Mr. Zahawi, who declared his leadership bid on Saturday, has committed to reducing taxes for “citizens, families, and enterprises,” while Mr. Shapps has pledged to reduce taxes for the poorest individuals.
In response to press reports that the government is investigating Mr. Zahawi’s tax troubles, he made a statement in which he denied being aware of any investigation and called the allegations “smears.”
He said that he would “address any queries” HM Revenue and Customs had for him and promised to publish his tax returns annually “to reassure colleagues and the wider public” if he becomes prime minister.
Mr. Shapps told Sophy Ridge on Sky News that he will halt next year’s company tax increase and that the 1p income tax drop “should take place immediately.”
Tom Tugendhat, chairman of the foreign affairs committee, stated on the same episode that he would reverse the National Insurance increase and decrease “crippling” gasoline charges.
In contrast to Mr. Sunak, who has downplayed the likelihood of tax cuts until public finances improve, a plethora of tax reduction measures has been announced thus far.
The former chancellor has not yet outlined his economic plan for the presidency, but he promises to provide more information in the coming days and weeks.
In a video, though, he cautioned against “comforting fairy tales” that would “leave our children worse off tomorrow.”
Yvette Cooper, the shadow home secretary, criticized candidates who pledged to repeal the National Insurance increase, noting that they had not opposed it alongside Labour at the time.
“I don’t believe any of them have presented costed alternatives,” she said on the Sunday Morning program.
She continued, “While they’ve been claiming to be a low-tax party, they’ve voted for 15 tax increases.”
Ms. Mordaunt, a former navy reservist, launched her leadership campaign by emphasizing her teambuilding skills and stating that leadership should be “less about the captain and more about the ship.” She has not yet revealed her policy stance.
However, shortly after launching, she was forced to publish a revised version of her campaign video because Paralympian Jonnie Peacock requested that his material be removed.
Two hours later, a new version of the film was uploaded, with footage of batsman Jonny Bairstow and the Welsh national football team removed.
The 1922 Committee of backbench Conservative MPs that organizes contests is scheduled to meet late on Monday to discuss the contest’s schedule and regulations early the following week.
It will be a two-stage process, with Conservative MPs narrowing the field down to two candidates through repeated rounds of voting before Tory party members select the victor.
While the campaign has yet to officially begin, Brexit opportunities minister Jacob Rees-Mogg has stated that after the contest concludes, people will “believe an election is required.”
In an interview with Channel 4’s Andrew Neil, he stated that many contenders will pledge not to call an early general election, but it is “very plausible” that one will be called if opinion polls favor Mr. Johnson’s replacement in the coming months.
