Labour backing Rishi Sunak to cut income tax by 2%

Labour is backing Rishi Sunak to cut income tax by 2% but warns the Tory pledge could be ‘just talk’

  • Labour’s shadow chancellor has voiced her support for cutting income tax by 2p
  • Rachel Reeves also warned though that the proposed move could just be ‘talk’
  • Earlier this week, it was reported Rishi Sunak proposed the cut to income tax
  • Total of ten proposals have been drawn up that will lower the current tax burden 

The shadow chancellor has urged Rishi Sunak to follow through with rumoured plans to cut income tax by 2p.

Labour’s Rachel Reeves voiced her support for the measure which the Chancellor reportedly wants to see implemented before the next General Election.

However, Reeves added that she isn’t confident that Sunak’s proposed plans will amount to anything other than ‘talk, talk, talk’.

Speaking on CityAm, Reeves said: ‘I think this speculation about Rishi Sunak cutting taxes, I think it is a sort of triumph of hope over reality.

Labour’s shadow chancellor Rachel Reeves (pictured) has urged Chancellor Rishi Sunak to follow through with rumoured plans to cut income tax by 2p

‘It’s all well and good to say the Chancellor believes in low taxes, but that doesn’t pay the bills, it doesn’t release money for investment. What does that is if you actually cut the taxes.’ 

Reeves added that politicians need to be judged on what they deliver, rather than what is promised.

While a Labour source told The Telegraph: ‘We want to see lower taxes for working people, but we are too far away from a general election to start setting out tax policies.’ 

Her comments come after The Times reported earlier this week that Rishi Sunak is said to be planning to slash income tax by 2p in the pound before the next election as he hopes to end his reputation as a ‘high-tax’ chancellor.

The Chancellor of the Exchequer is reportedly planning to cut income tax over the next three years, ahead of the next general election in 2024. 

Sunak has told officials to draw up plans that will lower the tax burden while the Conservatives are also considering scrapping the 45p raise to income tax.

His preferred plan is understood to be cutting income tax, but ten proposals have been drawn up in total, which include cutting inheritance tax and charging households using green energy lower rates. 

Mr Sunak hiked taxes at the Budget in October, with his changes set to push the tax burden to its highest level since Clement Attlee’s post-war Labour government in the early 1950s.

Earlier this week it was reported Rishi Sunak (pictured) was said to be planning to slash income tax by 2p in the pound before the next election as he hopes to end his reputation as a ‘high-tax’ chancellor

But Sunak is determined to end his reputation as a ‘high-tax, high-spend’ chancellor, while Boris Johnson also has hopes to be a tax-cutting prime minister. 

Amid reports of his income tax plans, Sunak is said to have told his colleagues that there will have to be tighter limits on public spending if the tax cuts can go ahead.

A Treasury source told The Times: ‘But things are tight and in order to deliver on our promise to cut taxes, we need to be disciplined on spending.’ 

Another proposal could see Sunak cut the VAT headline rate of 20 per cent, while the Treasury is reportedly working on plans to increase the inheritance tax threshold.

Sunak has told officials to draw up plans that will lower the tax burden while the Conservatives are also considering scrapping the 45p raise to income tax (stock image)

The current threshold stands at £325,000, which increases if it involves properties left to children, with 22,800 estates paying 40 per cent on anything higher. The figure has not been adjusted since 2009.

Of the ten proposals that have been drawn up, it is understood that more detailed work is being carried out on three plans, focused on cutting VAT, income tax and inheritance tax.

A treasury source reportedly said that although plans could be disrupted by Covid and inflation, both Sunak and the Prime Minister want the cuts to go ahead. 

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