Hunt Vows Conservatives Will Cut Taxes If They Win UK Election

(Bloomberg) -- Chancellor of the Exchequer Jeremy Hunt will pledge to reduce UK taxes after a looming UK general election if his governing Conservatives come out on top, in a speech Friday in which he’ll also reiterate an ambition to eliminate the country’s national insurance payroll tax.

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“Taxes will go down under a Conservative government because we will do the hard work necessary to keep our economy competitive,” Hunt will say, according to excerpts briefed by his office. “We know doing so will lead to more growth for the economy and more prosperity for British families.”

With just over eight months at most until the election, the Tories and poll-leading Labour Party are starting to draw electoral battlegrounds. Prime Minister Rishi Sunak began the week by making a speech in which he said the country would be less safe under a Labour government, while Labour leader Keir Starmer on Thursday unveiled a pledge card with six core promises to voters.

Starmer’s six pledges were to boost the economy, cut National Health Service waiting lists, recruit more teachers, tackle crime, invest in green technology and create a new border security unit focused on people-smuggling. There were no promises on tax, though the party has previously pledged not to raise the three main levies — income tax, national insurance and value added tax, if it wins the election.

That leaves the Tories with little to differentiate themselves on tax, traditionally solid territory for the governing party. However, their branding as the party of low taxes has been damaged in recent years as Sunak and Hunt put the UK tax burden on track to its highest level in 70 years.

Hunt will accuse Labour of “playground politics” for their criticisms of Tory tax rises brought in this Parliament to pay for pandemic-era policies and subsidies for households facing surging energy prices.

“Conservatives recognize that whilst those tax rises may have been necessary, they should not be permanent. Labour do not,” Hunt will say.

After cutting National insurance by 4 percentage points since November, Hunt will also double down on a commitment to eventually eliminate the payroll tax, despite Labour deriding it as an unfunded £46 billion ($58 billion) pledge.

“It is unfair that workers pay two taxes on their income – income tax and national insurance – when other people only pay income tax,” Hunt will say. “Which is why our ultimate aim, when it is affordable to do so, is to keep cutting NICs until it’s gone.”

Most Westminster observers expect the general election in the fall, but in theory, Sunak can wait as late as the end of January to go to the polls.

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