London (UK)- Rishi Sunak pledges ‘radical’ tax cut and attacks Liz Truss as party members start receiving ballot papers. The former chancellor pledges to cut the introductory income tax rate from 20p to 16p by the end of the next Parliament if he wins the race for Number 10.
Mr Sunak says it will be funded by “additional tax receipts generated by forecast economic growth”, promising not to increase government debt to cover the cost.
And he also pledges to “drive greater efficiency and reform” in government to deliver better value for money.
Speaking as party members begin to receive their ballots for the final leadership vote, Mr Sunak said his plan was “radical” but “realistic”, and it stuck to his “core principles” on the economy.
“Firstly, I will never get taxes down in a way that just puts inflation up,” he said. “Secondly, I will never make promises I can’t pay for. And thirdly I will always be honest about the challenges we face.
“Because winning this leadership contest without levelling with people about what lies ahead would not only be dishonest – it would be an act of self-sabotage that condemns our party to defeat at the next general election and consigns us to a long period in opposition.”
In an apparent swipe at his rival, Liz Truss, the ex-chancellor added: “There is no more serious choice than the one now facing Conservative members: to decide who leads our country at home and abroad during difficult times.
“As they turn to that decision I urge them to treat with caution any vision that doesn’t involve any difficult trade-offs and remember that if something sounds good to be true – then it probably is.”
Tax has been the main dividing line in the competition between Mr Sunak and Ms Truss to become PM.
She has outlined £30bn of tax cuts if she was to take office, including scrapping the proposed rise in corporation tax and reversing the government’s National Insurance hike.
Mr Sunak and a range of economists have claimed such action would see the current record high inflation in the UK go up even further.
But Ms Truss claims her plan would “increase tax revenues by growing the economy”, accusing the former chancellor of policies that “choke off growth by raising taxes” to a 70-year high.
A source from her campaign team accused Mr Sunak of performing “another U-turn on cutting tax”, after announcing he would cut VAT on energy bills, but said while it was “welcome” it was “a shame he didn’t do this as chancellor when he repeatedly raised taxes”.
They added: “Unfortunately it’s a case of ‘jam tomorrow’. People need tax cuts in seven weeks not in seven years. He has also made it conditional on getting growth first – knowing full well that his corporation tax rises are contractionary.
“The public and Conservative Party members can see through these flip flops and U-turns.”