British governing party announces tax cuts that it hopes can lift ailing election fortunes
British Treasury chief Jeremy Hunt is seeking to bolster spirits within his Conservative Party with a series of tax cuts that he hopes can turn the political dial ahead of a general election this year
LONDON — British Treasury chief Jeremy Hunt sought Wednesday to bolster spirits within his Conservative Party with another tax cut for 27 million working people, hoping it can turn the political dial ahead of a general election this year.
Even though the British economy has hit one definition of recession and public finances will remain stretched over coming years, Hunt used his annual budget statement to announce a further reduction in national insurance by 2 percentage points, to 8%. He cut this tax on wages by the same amount in November.
He promised to cut national insurance costs, which workers pay to qualify for a state pension, still further “so we truly make work pay.” But he made no mention of reducing the basic rate of income tax, which would have benefited retirees and savers — to the likely disappointment of many of his Conservative peers who are nervous about losing their seats in the upcoming election.
Poll after poll show the Conservatives suffering a historic defeat to the main opposition Labour Party.
Labour leader Keir Starmer challenged Prime Minister Rishi Sunak to call an election for May 2, while describing the budget statement as the “last desperate act of a party that has failed.”
The election has to take place by January 2025 but could in theory happen in May. Hunt’s boss, Sunak, will ultimately decide when the election will take place as their party tries to retain control of government, which they have held since 2010.
Hunt told Parliament that the British economy withstood the coronavirus
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