Last summer, all the Tory party could talk about was tax. It was at the heart of the leadership contest and the dividing line between Liz Truss and Rishi Sunak. The then foreign secretary promised to move fast and bring in deficit-financed tax cuts; the former chancellor said this would end in tears and instead pledged fully funded cuts over six years.
Neither plan saw the light of day. All talk of tax cuts was suspended after Truss’s mini-Budget, when the premise of her borrow-and-spend agenda was tested to destruction. Since then, tax has become a difficult topic to bring up. Even within Tory circles, calls to cut tax are usually met with a pointed question: did you forget what happened last time?
As a result, the Conservative party is heading towards a general election with the tax burden almost at its highest point in post-war history. ‘There was a gaping hole in the Prime Minister’s promises at the start of the year,’ laments a former minister. ‘Sunak promised to tackle inflation, he promised growth. He said nothing about taxes. You could forgive our voters for thinking we’ve forgotten what a burden we’ve put on their shoulders.’
Sunak’s supporters insist that he is a low-tax Tory who knows his party needs a compelling offer going into the next election. ‘All the difficult things we’re doing to get inflation down are so that we can then cut tax,’ says one government insider. ‘The cuts will be sustainable this time,’ they insist. But it is still unclear which taxes would fall and by how much.
‘I want to take an axe to inheritance tax,’ says one Tory MP, ‘but is that an election winner?’ Scrapping the much-loathed ‘death tax’ is an idea that has been discussed a lot over the past month.