London: Prime Minister Rishi Sunak is considering stamp duty reductions and other tax cuts for top earners after the Conservative Party’s latest by-election defeats, according to newspaper reports.
Senior Tories want to include a stamp duty cut in the general election manifesto if the economy improves, the Times reported, citing a person it didn’t identify. A separate tax cut for the UK’s 5 million highest earners is also under consideration, according to the Daily Telegraph.
The measures would be aimed at galvanizing voters ahead of general elections expected in late 2024. That’s after the opposition Labour Party unexpectedly overturned large Conservative majorities to win parliamentary seats at two by-elections on Thursday. The results suggested Labour is on track to take back power from the Conservatives for the first time since 2010.
The Tories are discussing whether to go ahead with stamp duty cuts or abolish inheritance tax instead, according to the Times. Downing Street has conducted surveys to find out which move would boost the party the most ahead of the general election, the report said. The measures could be announced as early as the 2024 spring budget.
UK government borrowing was lower than expected last month thanks to an inflation-induced tax boom, putting pressure on the government to cut taxes. That’s even as Chancellor Jeremy Hunt has made it clear he has no room for maneuver because elevated interest rates have driven up debt-servicing costs.
