Tory lead candidate Rishi Sunak has dismissed allegations by his successor as chancellor of being a “doomster” of the economy as he pushes ahead with his plan to cut income taxes by 20% by the end of the decade.
“As Chancellor, I was very keen to make sure I started cutting taxes,” Sunak told ` Radio 4’s Today program. “What I announced today builds on that and it’s because I believe in rewarding work and the best way for government to signal that is by cutting people’s income taxes.”
Incumbent Chancellor Nadhim Zahawi, who announced his support for Sunak’s rival Liz Truss in the Daily Telegraph on Monday, said: “Liz understands that the status quo is not an option in times of crisis.
“To quote the distinguished economist Sam Bowman, we need a ‘booster’ attitude to the economy, not a ‘doomster’ attitude, to address the cost of living issues and the challenges of the world stage. Liz will overturn outdated economic orthodoxy and run our economy in a conservative way.”
When asked to respond to Zahawi’s remarks, Sunak laughed and said: “As you can see, I find it quite amusing.” Citing his pro-Brexit credentials and economic aid package during the Covid pandemic, he added: ” It’s my opponent in this contest who wants to hold on to the failed orthodoxy of having these ultra-low corporate tax rates and, you know what, they don’t work to increase business investment in this country — we’ve been trying for a decade .
“It’s very different than doing things now that would make the situation much worse and put people’s mortgages at risk,” Sunak said in an attack on Truss’ ambitions to cut taxes immediately.
Sunak is under pressure to break into leading opinion polls that suggest Truss is among Tory members deciding the next prime minister elated as postal votes begin to fall on the Conservatives’ doormat. In the most recent YouGov poll, Truss holds the lead among Tory members, while the broader public favors Sunak at 28% versus Truss’s 25%, with 47% undecided.
Sunak’s proposed plan to cut income tax to 16p by the end of next Parliament would cost around £6billion a year. As prime minister, he said he wanted to lower income tax in a “responsible” way, ensuring it could be paid, and doing so in tandem with economic growth.
“I don’t think it would be wise to embark on a spate of excessive borrowing at a time when inflation and interest rates are already rising,” he added.
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It’s the latest political pledge, described by a Truss campaign source as “another U-turn” after Sunak recently vowed to reduce VAT on energy bills, a policy he rejected in office. And the UK is expected to have the lowest growth in the G20 – apart from Russia – and the worst growth in the G7 at around 0.5%.
“The public and Conservative Party members can see through these flip-flops and about-faces,” the source said.
When asked to name another country that has raised taxes in the face of a tight cost of living, Sunak said: “Every country will deal with it a little differently,” while emphasizing the UK’s publicly funded healthcare system through taxes and its growing arrears.
“What she is proposing is to stick with the failed orthodoxy of the last 10 years,” Sunak said of Truss’s policies, adding that people were looking at the last few months of Boris Johnson’s leadership through rose-colored glasses.
Sunak addressed Johnson’s behavior and referenced his resignation along with 60 MPs, saying the government is on the “wrong side of an ethical issue”.
In a bid to get the public back on track, Sunak said, “What you have seen from me today is an exciting, radical but realistic vision for lowering taxes in the years to come.”
He pledged to tackle NHS backlogs, confront the ‘awakened culture’, tackle illegal migration and capitalize on Brexit.
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