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Thu, 13 August 2020

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By Hft

Dominic Raab calls for 5p cut in income tax ahead of Tory leadership race

Dominic Raab calls for 5p cut in income tax ahead of Tory leadership race
2 min read

Dominic Raab has launched a fresh bid to woo Conservative MPs as he called for a 5p cut in the basic rate of income tax.

The former Brexit Secretary - who polls suggest is Boris Johnson's closest rival in the impending race to become the next Tory leader - said slashing taxes would "give working Britain a fairer deal".

The plan was outlined in a head-to-head debate with four other senior Conservatives organised by The Telegraph, and came as Theresa May prepares to step down and trigger a leadership contest.

Mr Raab said: "We should cut the basic rate of income tax by a penny each year as Nigel Lawson did in the 1980s... we, as Conservatives, are defending the enterprise economy and lower and middle-income aspirational working Britain."

The basic rate income tax is paid by those earning from £12,501 to £50,000.

Reducing it by a penny a year would see the basic rate fall from 20p in every pound earned to just 15p over the course of a Parliament.

The ex-Cabinet minister also called for the National Insurance threshold to be raised to £12,500, mirroring the level of earnings at which people start paying income tax.

But he said cutting taxes for those on higher incomes "would not be my first priority".

Treasury minister Liz Truss - who told the same event she would "maybe" run as Tory leader - meanwhile urged her party to be more "enthusiastic" as she talked up Donald Trump's tax-cutting agenda in the United States.

"We have been far too timid," she said. "We haven’t been bold enough. Whatever you say about Donald Trump he’s got a deregulatory agenda, a tax-cutting agenda and the American economy is growing by 3%."

Health Secretary Matt Hancock also backed "significantly lower" taxes, and told the event that the minimum wage needed to rise "faster and further".

He said: "We need to focus on making people better off - it’s about putting money back in people’s pockets."

The debate came as Chancellor Philip Hammond prepared to wade into the debate on the future of the Tories with a stark warning against any candidate who backs a no-deal Brexit.

In a major speech to the CBI business group on Tuesday night, he will tell MPs they now face the "real risk" of a new Prime Minister "abandoning" efforts to leave the bloc with a deal - a move that would "hijack" the result of the 2016 referendum.

The comments will be seen as a thinly-veiled attack on Brexiteers including Mr Raab and Mr Johnson.


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