Rishi Sunak refuses to commit to pre-election tax cuts

Prime Minister Rishi Sunak has told the BBC he wants to cut taxes but declined to say whether he would before the next general election.

Mr Sunak said his priority was easing living costs, as he faced calls to slash taxes on the first day the Conservative Party conference.

There is unrest among Tory MPs over tax and HS2 as they gather in Manchester.

And Cabinet Minister Michael Gove has told Sky News he would like to see taxes reduced before the next election.

This week, the Institute for Fiscal Studies (IFS) said tax levels in the UK were at their highest since records began 70 years ago – and were unlikely to come down soon.

In the days leading up to the conference, there have been calls for tax cuts from some Tory MPs, including former Prime Minister Liz Truss and her allies.

But Chancellor Jeremy Hunt – who will set out his economic plans in his Autumn Statement in November – said last week that tax cuts were “virtually impossible” at present.

In an interview with the BBC’s Sunday with Laura Kuenssberg, Mr Sunak was asked three times whether he would commit to lowering taxes before the next election, which is expected next year.

Mr Sunak – at his first conference as party leader – said as a Conservative, he wanted to cut taxes, but gave no detail on when he would do so.

The prime minister said he thought halving inflation by the end of this year, which is one of his five pledges for government, was the “best tax cut” he could deliver.

Inflation – the rate at which prices are rising – was 10.7% in the three-month period between October and December 2022, which means the government aims to reduce inflation to 5.3%.

In August, the inflation rate was 6.7%.

Curbing inflation, Mr Sunak said, was his biggest priority.

“Change may be difficult, but I believe the country wants change and I’m going to do things differently to bring about that change,” he said.

The government has limited tools to reduce inflation. The Bank of England says raising interest rates, which it controls, is the best way to make sure inflation comes down.

On the eve of the conference, the boss of Iceland supermarkets, Richard Walker, announced he was quitting the Conservative Party and accused the Tories of being “out of touch”.

But facing questions about discontent within his party over tax, green policies and the future of the HS2 rail line, Mr Sunak rejected claims the Tories were “drifting out of touch” with voters, as his party trails Labour in the polls.

The prime minister told Laura Kuenssberg that Mr Walker had talked about net zero and prioritising working people, adding: “Change may be uncomfortable for people. People may be critical of it, but I believe on doing the right thing for the country.

“I’m not going to shy away from that.”

He declined to comment on speculation about the government potentially scrapping the Birmingham-to-Manchester leg of HS2, following suggestions the cost of the project could exceed £100bn.

Mr Sunak said his focus was on “long-term things that make people’s lives better”.

Labour and some Tory MPs have said scaling back HS2 would be a mistake, with two former Conservative prime ministers – Theresa May and Boris Johnson – among them.

Until recently, Mr Sunak had played it pretty safe since becoming Conservative leader and prime minister a year ago this month.

He took over from Mr Truss in October last year without one vote being cast by Tory members in a leadership content, or voters in a general election.

In the interview, Laura Kuenssberg asked Mr Sunak if he was relaxed with holding office without anyone voting for the changes he had made.

“Yes, because I’m doing what I believe is right,” Mr Sunak.

Mr Sunak appears be leaning into controversial decisions.

After almost a year of prioritising calm – both economic and political – the prime minister has moved on to a new period where he is doing more to set out his vision for the future.

Last month, he watered down green policies designed to reduce planet-warming carbon emissions to net zero by 2050, and in recent days, has touted measures to help motorists.

Some opinion polls have showed a modest Conservative recovery, but the party still lags far behind Labour.

“The mood among Conservative MPs is really bleak,” one Conservative backbencher who had reluctantly travelled up to Manchester for their party conference told the BBC. “Most of us can see the polls and realise we are doomed.”

It was clear from this morning’s interview that Mr Sunak does not agree.

At times, the interview was spiky, with Mr Sunak staunchly defending controversial decisions on net zero and motorists, and repeatedly talking up himself as a “change” prime minister.

Expect more of that at his party’s conference this week: attempts to draw clear dividing lines with Labour and spell out more of what Mr Sunak would do with a full term as prime minister.

Each of those new policies is also an attempt to prove wrong fatalistic Conservative MPs who think the election result is already a done deal.