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Rishi Sunak Denies Using Post-Covid Tax Rises To Help The Conservatives Win The Next General Election

Rishi Sunak Denies Using Post-Covid Tax Rises To Help The Conservatives Win The Next General Election
5 min read

Rishi Sunak has been accused of plotting to use tax rises as a way of putting the Conservatives in a stronger position to win the next general election as the Chancellor prepares to unveil his Budget on Wednesday.

Sunak told the BBC’s Andrew Marr on Sunday that he wanted to “level with people” about the decisions the government had to make to help Britain recover from the coronavirus pandemic.

The government is expected to freeze the rate at which people start paying income tax and raise corporation tax as part of its plan to generate the £40 billion it says it needs to begin repairing the country’s finances, The Sunday Times and others report.

Also speaking to Marr, Shadow Chancellor Anneliese Dodds accused Sunak of raising taxes as far away as possible from the next general election, scheduled for 2024, so he could "wash his hands" with them before the UK next goes to the polls, in order to reap the political reward.

Labour has opposed Sunak's possible tax increases in a major shift in policy from their last election manifesto called for corporation tax to rise sharply.

“The big question is why are the Conservatives focused on this right now?” Dodds said.

Referencing reported conversations Sunak has had with Conservative MPs, she said: “To them he said he wanted to push those tax changes through now so they would be out of the way before the next general election, so that he could cut taxes at that point.

“That’s not being focused on our recovery, that’s being focused on his own party’s prospects at the next election”.

In other developments:

  • Dodds said that Labour wanted the government to make wholesale changes to how Universal Credit works as Sunak faces pressure to keep the £20 uplift for struggling families.
  • The government has announced £5bn worth of "restart" grants for helping shops, pubs, hair salons and other high street businesses reopen this spring and summer, the FT reports
  • Leading economist Paul Johnson has urged the government to speed up the easing of lockdown measures if the upcoming data is better than expected.
  • Food and logistics leaders have warned that post-Brexit checks on EU goods could disrupt supplies of meat, wine, veg and cheese as hospitality businesses reopen.

Sunak told Marr that he didn’t “recognise” his opposite number’s claim and that “given the shock we have had of the last year and the economic uncertainty we face, it would be brave to know exactly what’s going to happen in three years”.

Dodds said, however, that if Sunak presented a “long-term” plan for increasing corporation tax in Wednesday's budget, then Labour would “look at that favourably”.

Sunak refused to confirm specific economic policies that are widely reported this weekend amid restlessness among backbench Conservative MPs who oppose tax rises on their constituents.

He also dodged Marr’s question on whether the government would stick to all of its manifesto pledges in its plan for rebuilding the UK economy.

However, the Treasury has this weekend made a flurry of announcements on what to expect when Sunak delivers his Budget statement in the House of Commons on Wednesday.

Among them is a £5bn scheme to help shops, pubs, hair salons and other high street businesses re-open in the next few months as lockdown measures are removed, according to The Telegraph. Each business will be able to apply for a cash grant of up to £18,000, which will be directed to them by local authorities.

Sunak this morning refused to confirm whether he planned to reintroduce the contentious Eat Out To Help Out scheme but defended the decision to subsidise trips to pubs and restaurants last summer amid criticism that it contributed to the second wave of the virus in the UK.

“Lots of things we do cause transmission. We have to balance all of these things and those are difficult decisions we all have to make,” he told Marr.

“The decision that we made was to try and do our best to protect the over two million people who work in that industry.

“Young people disproportionally work in that industry, as do women, as do those on lower incomes. As a matter of social justice, trying to protect those jobs I believe is incredibly important”.

The government faces growing pressure to speed up its roadmap for easing lockdown measures if the data on new infections and the impact of vaccines is better than expected.

Paul Johnson of the Institute for Fiscal Studies told Sky News: “It’s very clear that if things move more quickly and more positively than expected, we have a very high fraction of people vaccinated and very low levels of infection, then yes it should be sped up.

“There’s no need to stick to a date if things go better than expected”.

He added: “Every month and week of additional lockdown is costing not just the economy, it is costing so many people so much in terms of their mental health, their education, their work and everything else that it should be as moved as quickly as is possible consistent with doing it safely.

“If we can do it quicker, we absolutely should”.

Sunak shot down this idea, however, telling Marr: "These are the earliest things by which things can happen".

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