Conservatives launch moral “moral mission” to cut taxes

Today the Conservatives are launching their Plan to Cut Taxes – a clear plan to cut taxes for people at every stage of life. 

It comes as Labour continue to refuse to rule out which taxes they will raise to fill the £38.5 billion hole in their finances, and the party faces fresh questions about their £2,094 of tax rises on every family. 

Prime Minister Rishi Sunak said that cutting taxes was a “moral mission” and he slammed Labour's £2,094 of tax rises that would “hammer working families hardest”.  

The Conservatives have committed to a suite of tax cuts worth £17.2 billion a year by the end of the decade, putting more money in the pockets of hard-working people, boosting the economy and giving pensioners the peace of mind and financial security they deserve. The plans are fully funded through delivering £12 billion of welfare savings and £6 billion from cracking down on tax avoidance and evasion. 

The measures in the Plan to Cut Taxes include:   

• Total abolition of the main rate of National Insurance Contributions (NICs) for self-employed in transformational boost to the economy and enterprise     
• Further 2p cut to payroll NICs by 2027, so we will have halved it from the beginning of this year, putting more money in the pockets of hard-working people      
• A Triple Lock Plus to protect pensioners from paying income tax on the State Pension, unlike Labour's Retirement Tax 
• A tax cut for parents by ending the single earner penalty in the High-Income Child Benefit Charge and moving the threshold to £120,000, up from £60,000 currently.  
• Stamp duty cut to revitalise property market and help young people get on the housing ladder    
• Temporary capital gains tax relief for landlords selling to a tenant to help people buy their first home   
• A guarantee not to raise income tax, national insurance or VAT  
• A workplace pension guarantee to not introduce any new taxes on pensions or increase existing ones for the whole of the next Parliament - unmatched by Labour  
• A family homes guarantee by committing not to change number of council tax bands, undertake an expensive council tax revaluation or cut council tax discounts – unmatched by Labour  

It comes as Keir Starmer refused to rule out a council tax raid to fund the £2,094 of tax rises Labour will need to find to fill its unfunded spending commitments. Starmer also confirmed that anyone who has savings – two thirds of the population – will be in the firing line for his tax rises. He defined ‘working people' - who he says will be protected from tax rises - as those who ‘don't really have the ability to write a cheque when they get into trouble'. 

In total Labour has refused to rule out:  

1. The new State Pension being dragged into income tax for the first time in history. 
2. Ending the 25 per cent tax free lump sum. 
3. Making tax relief on pension contributions less generous. 
4. Extending National Insurance to employer pension contributions.  
5. Increasing the number of council tax bands. 
6. Undertaking an expensive council tax revaluation as Labour have already done in Wales. 
7. Cutting council tax discounts, as Labour is currently doing in Wales. 
8. Increasing the rate and level of Stamp Duty. 
9. New levies or charges on bills while accelerating the rollout of renewables.
10. Increasing Capital Gains Tax. 
11. Increasing Employers' National Insurance (the ‘jobs tax'). 
12. Ending the Enterprise Investment Scheme. 
13. Cutting or ending the Seed Enterprise Investment Scheme. 
14. Ending Venture Capital Trusts. 
15. Ending Business Asset Disposal Relief. 
16. Ending Agricultural Property Relief and Business Relief.  
17. Maintaining the expanded ULEZ zone in Outer London and expanding road pricing beyond London.

The new Plan to Cut Taxes comes ahead of the latest inflation figures this morning. Since the Prime Minister made tackling inflation his key priority, inflation has fallen from 11.1% to 2.3% at the last set of figures in May 2024. 

Speaking ahead of the new inflation figures, the Prime Minister said:  

“When I became Prime Minister, spiraling inflation was our biggest economic challenge – and so I made halving inflation my key priority. Now, with inflation back under control, we can focus on cutting taxes and ensuring working people have the financial security they deserve.

“As Conservatives, we believe in lower taxes because people, not governments, make the best decisions about how to spend their money. Cutting taxes is a moral mission for me and I want to deliver tax cuts at every stage of life.  

“By contrast, raising tax is in Labour's DNA. The plans set out in Labour's manifesto would take taxes to the highest level in our country's history – and that's before you add in the £38.5 billion black hole in their promises.  

“That's the choice at this election – lower taxes with the Conservatives or a £2,094 tax hike under Labour that would hammer working families hardest.” 

ENDS 

Notes to Editors

Labour have repeatedly failed to rule out increasing Council Tax or conducting a Council Tax revaluation 

• Just this morning, Keir Starmer refused to rule out raising council tax. Q: ‘My question is, you said you're not going to raise income tax, VAT or National insurance, but what about council tax and pensions? Like at the minute, you get 25 per cent tax free and your private pension. Will you be reducing that figure so you'll end up paying more tax when you draw your pension?' STARMER: ‘Yeah. Sid on the question of tax we've been really clear we're not going to be raising tax on working people. So as you rightly say, that means no increase in income tax in National Insurance and in VAT' Q: ‘Council tax?' STARMER: ‘And then on top of that Sid, the approach we've taken is this we published our manifesto with our plans, and it said every single thing in that document is fully costed and fully funded… But beyond that, Sid, we are, none of our plans require a tax rise because our focus is on growth. So Sid, none of our plans require tax rises over and above the ones we've set out' STUDIO: ‘So you can say, now, there will not be an increase in council tax?' STARMER: ‘Look Nick what I'm not going to do is sit here two weeks before the election and write the budgets for the next five years'STUDIO: ‘So you can't rule it out?' STARMER: ‘What I what I can say is that none of our plans require a tax rise, and that is for a reason and the reason is our focus is on getting our economy going on building on, growing on, raising living standards, creating wealth' (LBC, 18 June 2024, archived). 

• Keir Starmer repeatedly refused to rule it out undertake a council tax revaluation and re-banding. RIGBY: ‘But the point is, is there are other taxes that affect working people, aren't there? What about council tax? I'm sure many people are worried about that, yeah? The Labour Party in Wales launched a review of council tax banding. Are you going to rule out a review in England too?' STARMER: ‘Well, council tax is too high for many people. It's been going up, it went up again this year, but that's because the government lost control' RIGBY: ‘So you're not going to do a review of the council tax bands?' STARMER: ‘I'm really trying...' RIGBY: ‘You know they were last revalued when I was a teenager and I'm really old now' STARMER: ‘Beth, you're pushing me over and over again on tax. I'm not wanting to raise tax. I think people are taxed too much already. What I want to do, my central mission, is to grow the economy. I'm not going to apologise for that, because I genuinely think that if you don't grow the economy, then you're taxing an ever-diminishing return' (Sky News, The Battle for Number 10, 12 June 2024, archived).   

• In an interview with the Financial Times, Rachel Reeves failed to rule out a revaluation of council tax and new council tax bands. The Financial Times reported that Rachel Reeves said ‘It doesn't really matter whether I think it's [council tax revaluation] sensible or not; is that where I'm going to put my political energy? No' leaving open the suggestion there could be a revaluation and new bands added (The Financial Times, 16 June 2024, link). 

• On Laura Kuenssberg, Wes Streeting refused to rule out a rise in council tax three times. STUDIO: 'And what about council tax? Would you rule out putting up council tax or revaluing the system? Because for social care, that's one of the income streams that councils absolutely rely on. But you would rule out putting up council tax?' STREETING: 'We don't want to see the tax burden on working people increase. I know the Conservatives have baked into their plans council tax rises. That's in the government's spending forecast. What Rachel Reeves is going to work to do is to get growth back into our economy, so we can invest in our public services and ease the tax burden on people' STUDIO: 'Would you rule out increasing or allowing councils to increase council tax still further?' STREETING: 'We are anxious about the burden of taxation on working people. That's why we've ruled out income tax, National Insurance and VAT rises' STUDIO: 'I'm asking you a different question about council tax. As you said, the current spending plans set out by the Conservatives assume a certain rise in council tax over time. But would you rule out increasing that even further and would you rule out a revaluation of the council tax system that many people actually think is long overdue?' STREETING: 'Well, I know the Conservatives have baked into their plans, inflation busting increases in council tax rises in fuel duty and other taxes that will that will hit working people. It's our ambition to get our country back to growth so that we can invest in our public services without clobbering people with higher taxes. Every promise in our manifesto is a promise we can keep and the country can afford. And none of those pledges in our manifesto requires increases in council tax, or increases in fuel duty, or any of the other number of taxes the Tories are claiming we want to increase, but you should ask Mark Harper because they haven't ruled out any of those tax increases. And it's time to scrutinise the Tories, because if there's a nightmare on Downing Street on the 5th of July, they will do what Liz Truss did on steroids because we have got this manifesto tens of billions of pounds of unfunded spending commitments' (BBC, Sunday with Laura Kuenssberg, 16 June 2024, archived). 

• Jonathan Reynolds refused twice to rule out a change in council tax bands under a Labour government. STUDIO: ‘There will be no change under a Labour government to council tax bands?' REYNOLDS: ‘These are not part of our plans. But to answer your earlier point...' STUDIO: ‘No, no, I asked, no change, no change to council tax bands?' REYNOLDS: ‘There there there is no change to council tax bands in our manifesto' STUDIO: ‘Hang on, Mr. Reynolds, you know, let's kind of be clear here. You aren't saying to us that in the next Parliament there will be no tax measures in any Labour budget other than those which are in the manifesto, are you?' REYNOLDS: What I'm saying to you is over these questions, is that...' STUDIO: ‘It sounds like that's what you're saying' REYNOLDS: ‘Let me just let me just answer this point. The premise of these questions is that the economy cannot grow any faster than it has done for the last 14 years, and therefore, the only way to fund public services is tax rises. We reject that case entirely' (ITV, Good Morning Britain, 18 June 2024, archived). 

Keir Starmer indicated that Labour would target those with savings with new tax rises 

• Keir Starmer indicated that his definition of not raising taxes on working people would mean instead taxing people with savings. STUDIO: What is a working person?  KEIR STARMER: A working person is... STUDIO: Simon Cowell? KEIR STARMER: Well, a working person is someone, who works their living and, uses our public services. The person I have in mind... STUDIO: So it is Simon Cowell?  KEIR STARMER: The person I have in my mind Nick, when I say, working people is people who earn their living, rely on our services and don't really have the ability to write a cheque when they get into trouble. So the sort of people I'm meeting pretty well every day now, I met a couple couple in Stafford, a paramedic, and her wife works in a jewellery shop. Their mortgage has just gone up several hundred pounds, and they don't have the sort of money in the bank, to pay for it. They're the people I have... STUDIO: So a working person is someone who works, who cannot write a cheque when they get into trouble. KEIR STARMER: And therefore relies on our public services like the NHS, etc. it's quite a big group because these days there are many people obviously not so well off. Even better off these days, particularly when it comes to mortgages, I mean, because it is important in politics, who do you have in your mind's eye? And I have all those people who are for the cost of living crisis in Southampton yesterday I had a woman who she's got one job, she's trying to get another job, and the bills are still bearing down on her. That's the sort of person I have in my mind my mind's eye (LBC, 18 June 2024, archived). 

• About two-thirds of the UK have access to some form of savings. According to the personal finance website Finder, ‘68% of Brits have some money in savings in 2024' (Finder, What are the average savings by age in the UK, 4 June 2024, link).