Rishi Sunak vows to cut tax, benefits and immigration in Tory manifesto

The PM is battling to turn around the fortunes of his party which is lagging far behind in the polls, as Political Editor Robert Peston, Economics Editor Joel Hills and Anushka Asthana explain

Words by Elisa Menendez, Westminster Producer

Rishi Sunak has unveiled the Conservatives' General Election manifesto, as he seeks to boost his party's chances after a damaging few days following his disappearance at D-Day commemorations.

His offer includes promises to cut national insurance again, scrap capital gains tax for landlords who sell properties to their tenants, "protected pensions" and a promise to halve migration.

The PM, unveiling the manifesto at Silverstone, Northamptonshire - the home of British Grand Prix - said the launch of his party's manifesto showed “our economy has truly turned a corner” and that his party’s policies would ensure “more British success stories”.

Mr Sunak attempted draw on the legacy of Margaret Thatcher, pitching the Tories as the party of “sound money” while drawing dividing lines with Labour - but the Institute for Fiscal Studies was quick to express "skepticism" about how plans will be funded.

In an unusual admission of fault, the PM also acknowledged "we have not always got everything right".

“I’m not blind to the fact that people are frustrated with our party and frustrated with me," he told the briefing, but insisted: "We are the only party in this election with the big ideas".

Hours later, Labour's Rachel Reeves held a rebuttal press conference accusing the party of "gaslighting" the public by creating a manifesto that is "a desperate wishlist of unfunded promises".

She claimed the manifesto contains £71 billion of unfunded commitments and could result in “a second Tory mortgage bombshell” as the parties continue to clash over tax and spend.

National insurance tax cuts

The Tories' manifesto pledges a tax cut for workers "by taking another 2p off national insurance”, adding: “The next step in our long-term ambition (is) to end the double tax on work when financial conditions allow.”

Going further, the party says it will abolish the main rate of self-employed national insurance "entirely" by the next Parliament in a promise to "support the self-employed".

Announcing a pledge to halve national insurance by 2027, Mr Sunak said: "That is a tax cut, my friends, worth £1,300 to the average worker.”

The Conservative Party manifesto states: “Our long-term ambition, when it is affordable to do so, is to keep cutting national insurance until it’s gone, as part of our plan to make the tax system simpler and fairer."

Sunak repeats £2,000 tax claim despite criticism from Treasury

Mr Sunak again repeated his party's claims that Labour will increase taxes by more than £2,000 per working family - a disputed claim he first made in an ITV debate against Sir Keir last week.

Since then, the Tories have repeatedly used the alleged tax rise to attack Labour, despite numerous leading economists saying the calculations have not been independently verified and the Treasury's own top civil servant casting doubt on the claim.

The UK's official statistics regulator investigated the claim and said the public have "no way of knowing" the truth about the claim and how it was produced.

It has descended into a bitter row, with Labour vehemently refuting the tax claim and accusing the Tories of being "liars", with Sir Keir alleging Mr Sunak has broken the ministerial code.

Mr Sunak told the press briefing to applause: "I know Labour have been taking inspiration from one of Brad Pitt's most famous films: 'The first rule of Labour tax rises is you don't talk about tax rises.' "But we know that the policies labour have already announced will require them to increase taxes on working households by £2,094 - it is our job to make sure that doesn't happen."

The calculation is based on Conservative estimates of Labour spending plans and covers a long list of policy announcements. The Tories claim the figures were the result of an official analysis by the Treasury and, therefore, independent of party politics.

However, the Treasury's senior official has urged ministers - in a letter leaked to media - not to attribute the Tories' claim that Labour's policies would cost £38.5 billion to civil servants. This therefore casts doubt on the tax claim.

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Benefits overhaul

Mr Sunak also said his party will implement "permanent reductions in taxation by controlling the unsustainable rise in working age welfare that's taken off since the pandemic".

"We believe it's morally right that those who can work do work and that hard work is rewarded, so we will ensure that we have lower welfare so we can deliver lower taxes."

This includes changes to personal independence payment (PIP) assessments, says the manifesto, alongside plans to “tighten up how the benefits system assesses capability for work”.

It will also overhaul the fit note process "so that people are not being signed off sick as a default”.

Other proposals include: “Introduce tougher sanctions rules so people who refuse to take up suitable jobs after 12 months on benefits can have their cases closed and their benefits removed entirely.”

Director of leading economist think tank, the Institute for Fiscal Studies, Paul Johnson, said he is skeptical about the Tories plans to fund tax cuts partly by reducing the welfare bill.

“Giveaways are paid for by uncertain, unspecific and apparently victimless savings. Forgive a degree of scepticism," he said.

Migration

The Conservative manifesto also promises a “regular rhythm of flights every month” to Rwanda if the party remains in power.

It states: “We will run a relentless continual process of permanently removing illegal migrants to Rwanda with a regular rhythm of flights every month starting this July, until the boats are stopped.

“If we are forced to choose between our security and the jurisdiction of a foreign court, including the ECHR, we will always choose our security.”

Mr Sunak said his party "took control of our borders" with Brexit but admitted that migration has been too high in recent years.

Despite the numbers of people crossing the Channel to seek asylum in the UK rising to record levels, the PM insisted he has a "bold plan" to reduce this.

“Last year we announced changes which means 300,000 people who were previously eligible to come here now can’t and we will introduce a migration cap that means parliament, your elected representatives, will vote on how many people should be able to come here every year," he told the briefing.

“Our plan is this: we will halve migration as we have halved inflation, and then reduce it every single year.”

In another hit at Sir Keir, Mr Sunak said Labour "have no answer to this question".

“We saw the other week Keir Starmer simply can’t tell you what he would do with people who come here illegally because he doesn’t believe it’s a problem," he said.

Watch Rishi Sunak launch the Conservatives' party manifesto

Housing

The Tories also pledge they would deliver around 1.6 million new homes by speeding up planning on brownfield land in inner cities and "scrapping defective EU laws".

Mr Sunak also said he "will abolish stamp duty entirely" for first-time buyers on homes up to £425,000.

He said: "We'll also introduce a new form of Help to Buy a new Help to Buy scheme - to get the new generation onto the property ladder, all part of our plan to build an ownership society, where more and more people have the security and pride that comes from owning your own home."

But the party's housing pledges have already drawn criticism for not going far enough, with the National Residential Landlords Association saying they "do nothing to address the shortage of homes to rent".

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “As the Institute for Fiscal Studies has warned, changes to mortgage interest relief and the level of stamp duty paid by landlords have led to higher rents and stifled the supply of homes across the private rental market.

"This comes at a time when the number of tenants enquiring about every available rental property has more than doubled compared with before the pandemic.”

Single-sex spaces

The Equality Act would make it “clear that sex means biological sex”, Mr Sunak said, unveiling another pledge in the manifesto.

“Parents should also feel that it’s safe for their children to walk home at night, so we will recruit 8,000 new police officers, one for every neighbourhood, and cut antisocial behaviour through intensive hotspot policing," he said.

“We will protect women and girls by guaranteeing single-sex spaces through an amendment to an Equality Act to make it clear that sex means biological sex.”

Labour allege £71 billion black hole in Tory costings

Sir Keir Starmer this morning attacked the Tories, accusing them of producing a manifesto that resembled that of his predecessor, Jeremy Corbyn, "where anything you want can go in it".

He said: "This is coming from the party that's put tax to the highest level since, you know, for 70 years.

"And they're building this sort of Jeremy Corbyn-style manifesto where anything you want can go in it. None of it is costed.

"It's a recipe for more of the same."

Labour’s Rachel Reeves said analysis by her party suggested the Tory plans required an extra £17.4 billion of borrowing in 2029-30, and a total of £71 billion over the whole five-year period.

That could result in the Bank of England putting up interest rates by 56 basis points, resulting in someone with an 85% mortgage on the average house in England facing £4,800 in extra mortgage payments over the five years.

She told the central London presser: “The consequence of an increase in day-to-day borrowing to fund the commitments made in this manifesto would amount to a second Tory mortgage bombshell, because higher borrowing at this scale would force the Bank of England to increase interest rates.

“The result would be an increase in the average mortgage totalling £4,800 over the course of the parliament.”

The Conservatives hit back by accusing the shadow chancellor of “confusing facts and fiction on numbers”.

Ms Reeves also sought to draw comparisons between Mr Sunak and Ms Truss, whose 2022 mini-budget sent the value of the pound tumbling and mortgage rates soaring due to the market’s adverse reaction to its £45 billion of unfunded tax cuts.

She said: “He (Mr Sunak) said he was the antidote to Liz Truss. Instead, he’s cosplaying Liz Truss by again doing what the Conservatives did in that mini-budget with £71 billion of unfunded commitments.”

The former Bank of England economist warned that after the mini-budget “mortgage rates spiralled and people found themselves paying – the 1.5 million re-mortgaging this year alone – paying £240 extra”.

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