Tax Cuts, Spending and Borrowing: Candidates’ Positions

After a weekend gold rush of tax cut promises, this morning it seems the conversation is swiftly moving on to how each candidate will pay for them. Given the leadership race is swiftly becoming a test in remembering slightly differing tax offerings – often quite vague pledges – Guido thought a repository of what each candidate is offering on tax and spending would be useful. He’ll try and keep it updated as and when pledges are made…

Sajid Javid:

  • Tax cuts promised: £47-£52 billion a year
    • Cut corporation tax by 1% a year until it reaches 15% – up to £34 billion, albeit with returns of up to 50% back thanks to growth and investment
    • Reverse National Insurance – £18 billion
    • Bring forward the 1p income tax cut – £6 billion
    • Fuel duty cut by 10p – £4.8 billion

Jeremy Hunt

  • Tax cuts promised: £39 billion
    • Immediate cut to corporation tax to 15% – £34 billion
    • Five-year business rates holiday in Red Wall – £Unknown

Liz Truss

  • Promised to reverse the national insurance increase: worth between £13 billion and £18 billion a year by 2025-26
  • According to The Telegraph Truss will fund the move by bringing down public debt over a longer timeframe than current plans, which will theoretically see it falling by 2024

Nadhim Zahawi

  • Has cited policies such as:
    • A cut in income tax, with the base rate going to 19p in 2023 and 18p in 2024
    • A review of business rates
    • Cancelling the planned corporation tax rise
    • Abolishing VAT on energy bills for two years
    • “Tax as a percentage of GDP will fall year on year if I become prime minister”
  • Zahawi is the first tax-cutting candidate to spell out cuts to pay for them, forcing every government department to cut running costs by 20%

Penny Mordaunt

  • Will halve VAT on petrol and diesel: £7.2-£9.6 billion
  • Expected to scrap the planned £13 billion national insurance hike
  • Expected to cut corporation tax

Grant Shapps

  • Would hold an immediate emergency budget, taking 1p of income tax
  • Would scrap the planned corporation tax rise
  • Would increase defence spending to 3% of GDP annually
  • Would pay for this with unspecified cuts, though believes savings can be made by improving government efficiency and cutting red tape

Tom Tugendhat

  • Will reverse the National Insurance rise
  • Will reduce “crippling” fuel taxes, though hasn’t specified how much
  • Refused to say whether public sector workers should get a pay rise

Kemi Badenoch

  • Wants lower taxes “to boost growth and productivity”
  • Will accompany this with “tight spending discipline”

Suella Braverman

  • Promises “rapid” tax cuts
  • Has endorsed the Conservative Way Forward Charter for Tax Cuts
  • Will cut VAT on energy
  • Reduce” the planned tax increases that are “putting off investment”
  • Will suspend the UK’s current aim to achieve net zero by 2050

Rishi Sunak

  • Believes taxes can only be cut once the public finances have improved
  • ‘Tax cuts must wait’
  • Continuing his plans for a corporation tax rise from 19% to 25% next April
  • Has instead begun his campaign by focusing on women’s rights

Rehman Chishti

  • Don’t be silly.
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