Home Business News A ‘fiscally responsible’ Prime Minister may be best for the UK in the long term

A ‘fiscally responsible’ Prime Minister may be best for the UK in the long term

by LLB political Reporter
13th Jul 22 1:19 pm

When a new Prime Minister is eventually in place, the reality for them and their Chancellor is likely to be very different to the euphoria surrounding the current leadership contest, say leading tax and advisory firm Blick Rothenberg.

Nimesh Shah, CEO at the firm said: “With the country’s tax burden at its highest for 70 years, seven of the eight remaining Conservative leadership contenders have opened their campaigns leading with pledges around cutting tax.

“In a notable slight against the former Chancellor and a front-runner to be next Prime Minister, Rishi Sunak, the remaining candidates have said that they would reverse the main measures Sunak had introduced during his 2 ½ years as Chancellor. These include reversing the 1.25% National Insurance increase (the Health and Social care levy), cancelling the planned increase to corporation tax to 25% from April 2023, and Penny Mourdant offering to increase the basic and higher tax thresholds by inflation.”

Nimesh added: “Rishi Sunak is the obvious outlier in the race, ruling out tax cuts until the public finances improve. This is a risky leadership campaign strategy, but he is the closest to the detail of the public finances and suggests the other candidates should heed his warning.”

Nimesh said: “A new Prime Minister and their Chancellor will have a difficult job on their hands. Promises of wild tax cuts could be enough to put new occupants into Downing Street, but the cost will be eye-watering, with estimates putting the total cost of the candidates’ promises so far at £330 billion.

“Whilst short-term tax cuts will offer some respite to working families combatting the cost of living, the fiscal stimulus will undoubtedly fuel further inflation and do nothing to tackle the nation’s debt which is as much as the size of the UK economy.”

He added: “A fiscally responsible former Chancellor may not offer the change the public desires, but it may be right for the long-term future of the UK economy.”

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