‘Low taxation’ Rishi Sunak ridiculed as Tories and Labor clash over economy
Labor has questioned Rishi Sunak’s attempt to portray himself as a low-tax Tory as both parties claim to be the most reliable in the economy.
The Chancellor and Labor leader Keir Starmer will both deliver speeches on Tuesday making the case for the next Prime Minister.
Sunak, seen as the Tory most likely to succeed Boris Johnson if the PM is toppled by the partygate scandal, will insist he wants to create a ‘low-tax economy’ in an appeal to the Tories traditional.
Meanwhile, Starmer will evoke the spirit of former Labor Prime Minister Harold Wilson as he promises that the “white heat” of a new technological revolution will bring prosperity to all.
But in an attempt to thwart Sunak’s ambitions, Labor will claim the Chancellor has imposed 15 tax hikes on households and businesses in the past two years – and raised the most taxes on average per budget than any Chancellor over the past 50 years.
Amid the cost of living crisis, the Chancellor and Prime Minister refused to back down on the 1.25 percentage point National Insurance hike for April despite pressure from many Tory MPs.
In a lecture at London’s Bayes Business School, Sunak is set to insist he will make ‘tough and often unpopular arguments’ over spending, hinting at his determination to resist calls from cabinet colleagues to get fresh money.
He will argue that future tax cuts must be done ‘responsibly’, following a row with Health Secretary Sajid Javid over funding for the ‘living with Covid’ plan.
Sunak is expected to say, “I am a firm believer in lower taxes.
“The marginal pound our country produces is much better spent by individuals and businesses than by the government.
“I will propose a low-tax economy, but I will do so responsibly and in a way that addresses our long-term challenges,” he added.
But in comments that will be seen as a challenge to ministers demanding more spending, he is expected to say: “Cutting taxes in a sustainable way takes hard work, prioritization and the will to do make difficult and often unpopular arguments elsewhere”.
He will also say he is “dispirited” when he hears the “glib assertion” that tax cuts always pay off, adding: “It doesn’t.”
In response, Shadow Chancellor Rachel Reeves used the speech to brand the Conservatives the ‘high tax’ party because they were ‘the low growth party’.
“In a decade of Conservative government, the economy has grown much slower than when Labor was in power, and is expected to grow even slower in the years to come,” she said, citing research suggesting the £27.3bn raised by Sunak per year. is greater than that contributed by 12 Conservative and Labor predecessors to the Treasury since 1970.
Elsewhere, Starmer will promise to build a “new security economy” by borrowing from Wilson’s 1963 pledge to harness “the white heat of technological change”. At the time, Wilson was seeking to become the first Labor prime minister in over a decade.
Speaking in Wilson’s hometown of Huddersfield, West Yorkshire, Starmer will say that after 12 years of Conservative government, it will be up to Labor to deal with the next generation of change.
“Our country and our economy are completely different now, but we too are going through the white heat,” he should say.
“We are facing our own revolutions in technology and industry, and it will be up to the next Labor government to shape that change so that it works for all.”
It marks the latest step in his efforts to restore the party’s economic credibility in the eyes of voters following controversy over Jeremy Corbyn’s plans.
Starmer will declare his determination to put an end to the “economic fatalism” of the conservatives, whom he will accuse of lacking a clear business plan.
“Britain cannot meet the big challenges of the day without business innovation,” he will say.
“A political party without a clear plan to make sure businesses succeed and grow…that doesn’t want them to succeed and make a profit…has no hope of being a successful government.”
He will argue that if the Tories had matched Labour‘s record for growth, people would have enjoyed higher incomes while an extra £30billion a year would have been available for public services without raising taxes.
“We will build a new security economy, where job stability will be the foundation for a better future for the next generation,” he will say.
“We will build an economy of prosperity, in which the places that once powered Britain will thrive again. We will build a new economy of respect, where the contribution of every worker and employee is valued.