Rishi Sunak has been urged by the shadow chancellor to continue with the rumoured plan to reduce income tax by 2p.
Rachel Reeves, Labour’s Labour Party member, endorsed the measure that the Chancellor wants to implement before the next General Election.
Reeves said that Sunak’s plans are merely ‘talk, speak, talk’.
Reeves stated, speaking on CityAm: “I believe this speculation about Rishi sunak cutting taxes is a kind of triumph over reality.
Rachel Reeves, Labour’s shadow chancellor (pictured), has asked Rishi Sunak for his support in implementing the rumoured plans of reducing income tax by 2p
“It is all very well to declare that the Chancellor supports low taxes. But it does not pay the bills and doesn’t allow for money to be invested. That is, if the tax rates are actually reduced.
Reeves stated that it is important to judge politicians on the results they provide, not what they promise.
A Labour source said to The Telegraph that while they wanted lower taxes, the country is too far away for a general election in which to begin defining tax policies.
Her comments come after The Times reported earlier this week that Rishi Sunak is said to be planning to slash income tax by 2p in the pound before the next election as he hopes to end his reputation as a ‘high-tax’ chancellor.
The Chancellor of the Exchequer is reportedly planning to cut income tax over the next three years, ahead of the next general election in 2024.
Sunak has told officials to draw up plans that will lower the tax burden while the Conservatives are also considering scrapping the 45p raise to income tax.
Although his preferred plan seems to be to cut income tax, ten other proposals were made, including lowering inheritance tax and charging lower green energy rates for households.
Sunak increased taxes to the Budget in Oct., and his modifications will cause the tax burden at its highest point since Clement Attlee’s early 1950s Labour government.
Rishi (pictured) is reported as planning to cut income tax by two pence in the pound ahead of the next election. He hopes this will end his reputation for being a “high-tax” chancellor.
But Sunak is determined to end his reputation as a ‘high-tax, high-spend’ chancellor, while Boris Johnson also has hopes to be a tax-cutting prime minister.
Amid reports of his income tax plans, Sunak is said to have told his colleagues that there will have to be tighter limits on public spending if the tax cuts can go ahead.
The Times received information from a Treasury source that stated: “But, things are tight. In order to fulfill our promise of cutting taxes, we have to be strict about spending.”
Sunak may also reduce the VAT headline rate to 20 per cent. The Treasury, meanwhile, is said to be working towards raising the inheritance tax threshold.
Sunak told officials to create plans to lower taxes while Conservatives look at scrapping the 45p rise in the income tax. (stock image).
The current threshold stands at £325,000, which increases if it involves properties left to children, with 22,800 estates paying 40 per cent on anything higher. Since 2009, the figure hasn’t been updated.
It is believed that three of the 10 proposals have received more detail than others. They are focused on cutting income tax, VAT and inheritance taxes.
A source close to the Treasury said that while Covid or inflation may disrupt plans, Sunak as well as the Prime Minister would like the cuts to proceed.