Prospective Conservative Leadership Candidates Fight It Out On Tax Cuts

The Conservative Party leadership contest to succeed Boris Johnson as party leader and prime minister has got underway in earnest today, with prospective candidates lining up to promise major tax cuts in an effort to woo fellow MPs and Conservative party members alike.

• Potential tax cuts to ease burdens on households, businesses or both has been the main talking point in the early stages of the contest, rather than other frequent topics such as the broader economic landscape, or public services.
• Former Health Secretary Sajid Javid has launched his campaign promising, among other things: Cut fuel duty by 10p per litre, scrap NI rise from 2023, bring forward 1p income tax cut to 2023, and scrap the upcoming corporation tax increase.
• Chancellor of the Exchequer Nadhim Zahawi has proposed: Income tax base rate cut to 19p in ‘23, and to 18p in ‘24 , 2yrs with no VAT on energy bills, 2yrs with no green levies on energy bills, and scrap the corporation tax rise.
• Much of the rhetoric on tax cuts, with little info (so far) on how they are to be funded could cause some concerns for financial markets as the contest moves into its later stages.
• However,. important to remember that at present prospective candidates are seeking to appeal to Con MPs and members, who sit further on the right of the political spectrum than Conservative voters or general public. Once in office, there is the possibility that the new leader shifts back towards the centre ground to offer a broader appeal to the electorate, rather than just the party faithful.