Rishi Sunak is facing demands for tax cuts and pensions protection
Tory MPs will urge Rishi Sunak to slash taxes and ease the burden on working families during this year’s party conference.
The Prime Minister is said to be drawing up plans to cut inheritance tax before eventually abolishing it entirely. But many Tories hope it will be the first of a string of policy announcements setting out how households can keep more of their hard-earned money.
The Daily Express understands that many backbenchers are united on “what we need to see in order to win” the next General Election.
MPs believe the Government will “not be able to ignore” the case for lower taxes as many of their ideas are supported by the public.
Mr Sunak was also yesterday warned he must not betray Britain’s “silver vote”. He is said to have been told it will be “political suicide” to scrap the state pension triple lock.
Mr Sunak is under increasing pressure to go further to help millions struggling with the cost-of-living crisis, with many Tories believing income tax cuts could jump-start Britain’s economy. It comes ahead of the annual party conference in Manchester next week.
Former home secretary Dame Priti Patel said: “People should be in control of their income and have the ability to determine the future of the assets they have worked hard to save and build up during their lifetime.
“Substantial long-term reform is required and I would encourage proactive steps to support hard-pressed families across our country. The current inheritance tax system is regressive and punitive.”
Sir Simon Clarke, former chief secretary to the Treasury, said: “If we are choosing our priorities for tax cuts, income tax should surely trump inheritance tax every time – 3.8 percent of UK estates pay inheritance tax. The great majority of those in work pay income tax.
“I understand why inheritance tax is inherently resented, but at a time when we face profound problems of intergenerational unfairness, we should focus our ability to ease the burden on rewarding the value of work.”
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Defence Secretary Grant Shapps has said that Chancellor Jeremy Hunt is in a “fiscal straitjacket”, indicating that immediate changes in November’s Autumn Statement were unlikely.
Mr Shapps said: “You will certainly have to wait for a Budget or another event for the Government to set out whatever the plans will be.
“Generically, I’m in favour of all taxes being lower, but we’ve got to be fiscally responsible.” Inheritance tax is currently charged at 40 percent on estates worth more than £325,000, with an extra £175,000 allowance towards a main residence if it is passed on to children or grandchildren.
Reforms to Britain’s most hated tax are being actively discussed at the highest level of Government, sources said. Mr Sunak could reduce the 40 percent rate in the Budget in March and set out a pathway to abolish it completely afterwards, it was said.
Mr Shapps, whose father died recently, added: “Unfortunately, I just lost a parent and I can understand entirely why people find inheritance tax punitive. I think it’s a question for many people of aspiration, and people know that there’s something deeply unfair about being taxed all their lives and then being taxed in death as well. However, there are lots of different tax considerations for the Chancellor.”
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Downing Street sources pointed to Mr Hunt’s insistence that tax cuts are “virtually impossible” at the moment given the state of the public finances.
But a senior Government source said: “No10 political advisers have been looking at abolishing inheritance tax as something that might go in the manifesto. It’s not something we can afford to do yet.”
In another sign Mr Sunak is preparing the ground for an election, Tory strategists have reportedly decided any changes to the
triple lock would be too damaging to the party’s chances.
This means the PM is expected to fight the next election while pledging to keep the lock, which links increases in the state pension to wage rises, inflation or 2.5 percent – whichever is highest.
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Treasury officials had been discussing taking a one-off break from the triple lock.
A Government source said: “The rise in wages and inflation has made it a very expensive measure, but the political cost of abolishing it would be higher. Suicidal.”
More than 225,000 people have backed a Daily Express and Silver Voices petition urging the PM not to abolish the triple lock. But the Express understands that the Government, despite being under pressure from its own MPs to cut taxes, is focusing on cutting inflation first.
Mr Hunt said last week: “If you look at what we are having to pay for our long-term debt, it is higher now than it was at the Spring Budget. If we do want those long-term debt costs to come down, then we need to really stick to this plan to get inflation down.”
So, Rishi Sunak has been advised that it would be “political suicide” to abandon the triple lock on state pension increases. Thousands of older people have been trying to tell him that for weeks – and no doubt Conservative candidates in the coming by-elections are getting it in the ear on the doorsteps.
At the faintest whiff of concern that the Tories were wavering over their manifesto commitment to the lock, we launched our petition with the Daily Express calling on Mr Sunak to guarantee the full triple lock increase for next April.
The petition gained over 200,000 signatures in the first week – and now stands at more than 240,000 – showing the extent of public support for this vital safeguard for older people. It is not surprising that the PM’s closest advisers appear to be warning him of the electoral consequences of taking on the Silver Vote.
But we are not resting on our laurels. Mr Sunak and his ministers have still not confirmed they will apply the full average earnings figure of 8.5 percent to the state pension as required by the lock formula and past practice.
We warn the Government that any attempt to fiddle with the usual formula to make savings will be seen as a betrayal of their 2019 manifesto commitment. That is just how we viewed the suspension of the triple lock in 2022/23. That change ended up costing pensioners up to £500 per year.
Whenever the triple lock is not applied in full, this represents a permanent cut in the basic state pension, carried forward year by year.
So Prime Minister, please complete the job. Confirm that you will apply the full increase in April 2024 – and we will pause our petition. The epithet “political suicide” applies to any party which is equivocal about the future of the triple lock.
Congratulations to the Liberal Democrats for being the first party to confirm that the lock will be a general election manifesto promise.
We now want to see the same commitment from the Conservatives, Labour, SNP and Greens, together with the main political parties in Wales and Northern Ireland.
Older people represent about a quarter of the electorate and are far more likely to vote than the younger generations are. And the triple lock has become symbolic of how our society supports retired people.
So, politicians, betray us at your peril.
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