Most of the 11 contenders have promised to ease a tax burden that is set to hit its highest since the 1940s
The Bank of England in the City of London, UK, June 15 2022. Picture: HOLLIE ADAMS/BLOOMBERG
With little mention of any offsetting spending cuts, the pledges mark a further departure from the era of fiscal restraint — or austerity — that was the hallmark of Conservative Party policy for much of the decade before the coronavirus pandemic spurred a historic surge in spending, and debt. "[It] feels like this leadership election is dodging the key issue facing the Conservative Party: you can’t have [Margaret] Thatcher levels of taxation and Johnson levels of public spending,” said Gavin Barwell, who was chief of staff to Johnson’s predecessor, Theresa May.
While tax cuts could inject some stimulus into an economy that looks set to flatline in 2023, a wider budget deficit might further weaken the pound and stoke inflation. While there is little detail about the candidates’ promises, differences are emerging on the scale of the support being offered by Johnson’s successors.
By contrast, Rishi Sunak — who was finance minister until his resignation last Tuesday — has stressed the need for fiscal restraint and dismissed the “comforting fairy tales” of rival contenders that would leave the next generation poorer.
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