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Rishi Sunak's tax promises as he launches Tory leadership campaign

Rishi Sunak speaking at the launch of his campaign to be Conservative Party leader and Prime Minister, at the Queen Elizabeth II Centre in London. Picture date: Tuesday July 12, 2022.
Rishi Sunak is the bookies favourite in the Tory leadership race to replace Boris Johnson. Photo: PA (PA)

Rishi Sunak has kicked off his leadership campaign with a promise to get a grip on inflation and lower taxes while warning Tories not to be bought by “fairy tale” promises.

The former chancellor insisted he has a plan to deal with the economic “headwinds” the country is facing, saying it is a matter of “when” not “if” the tax burden starts to fall.

He said: “I have a plan to steer our country through these headwinds. Once we have gripped inflation, I will get the tax burden down. It is a question of ‘when’, not ‘if’.”

Sunak promised “a return to traditional Conservative economic values – and that means honesty and responsibility, not fairytales.”

Promises to cut taxes have become the dominant theme so far of the race to succeed Boris Johnson as Conservative party leader.

The former chancellor warned that tax cuts now would stoke inflation and increase borrowing. “I have had to make some of the most difficult choices in my life when I was chancellor, in particular how to deal with our debt and borrowing after COVID,” he will say.

“I certainly won’t pretend now that the choices I made, and the things I voted for, were somehow not necessary. Whilst this may be politically inconvenient, it is the truth,” Sunak is set to say, in a swipe at other Tory leadership contenders who have now denounced tax hikes they voted for in cabinet.

"We need to have a grown-up conversation about the central policy question that all candidates have to answer in this election. Do you have a credible plan to protect our economy and get it growing?

"It is not credible to promise lots more spending and lower taxes."

Read more: FTSE 100 slips as Rishi Sunak launches Tory leadership bid

Under current government plans, the total tax burden is set to reach its highest level since the 1940s, according to official forecasts.

Sunak also paid tribute to Johnson, saying he's "remarkable" and "has a good heart". He also said Dominic Cummings has had nothing to do with this campaign, and will have nothing to do with any government he leads.

Grant Shapps, the transport secretary, has pulled out of the Tory leadership candidate and endorsed Rishi Sunak. Deputy prime minister Dominic Raab has also pledged his support.

Raab appeared on stage with Sunak for the Westminster launch to back a programme based on fiscal discipline and a pledge to cut taxes only when inflation is under control.

Sunak also received heavyweight support from another ex-chancellor, Lord Lamont.

Ahead of the launch event, Lord Lamont said: “The country faces an extremely serious economic situation.

“To weather the storm requires a high degree of competence, matched by the courage to make really tough decisions. The public understand this better than many politicians and will respond.

“Tax cuts unmatched by spending cuts achieve nothing. Yes, the tax burden needs to be reduced, as Rishi also believes, but only as and when the public finances allow.

“Mrs Thatcher often said dealing with the deficit comes even before reducing taxes. Deficits are just delayed taxation.

“Rishi has the skill, determination and ideas to get us through this difficult period into more prosperous times.”

Read more: Who could the next Tory leader be? Runners and riders to replace Boris Johnson and latest odds

Many Tory MPs are convinced Sunak will make the final shortlist of two names. He is the bookies favourite in the Tory leadership race and has the highest number of publicly announced supporters among candidates.

Candidates require the support of 20 MPs in order to make the leadership contest, with nominations closing later on Tuesday.

The party ruled on Monday that the leadership race will be decided on 5 September.

Watch: Britain's 'richest' MP: Who is Tory hopeful Rishi Sunak?