Sunak Pledges Tax Cut for Parents in Move to Narrow UK Polls
(Bloomberg) -- Rishi Sunak’s Conservatives are pledging to raise the threshold at which parents lose access to child-care benefits, in their latest effort to shift opinion polls that continue to show the opposition Labour Party is set to win the UK general election.
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Sunak would increase the earnings threshold at which people begin to pay the High Income Child Tax Charge to £120,000 ($153,500), up from £60,000 currently, the Conservative Party said in an emailed press release. The benefit would be awarded based on a household’s entire income, rather than that of the top-earning parent, if the Tories won the election.
The change would have the effect of saving some 700,000 families an average of £1,500, the party said, claiming it could fund the giveaway through a previously crackdown on tax avoidance that it said could raise £6 billion. A Labour spokesperson called the policy “desperate and unfunded.”
The proposal would help higher income families who miss out on child-care benefits when one parent earns more than £60,000-a-year. It appears aimed at the middle-classes and aspirational voters in swing seats, and is designed to allow Sunak to claim that parents would pay more tax under Keir Starmer’s Labour. It echoes a tactic the premier used in the opening week of the campaign when he pledged to cut taxes for pensioners, subsequently arguing that Starmer would make retired people pay more.
Still, there is little evidence that Sunak’s blitz of policy announcements and tax cuts are doing anything to move opinion polls in Britain. Four weeks from election day on July 4, the Tories still trail Labour by 21.7-points, according to Bloomberg’s polling composite, a rolling 14-day average using data from 11 UK polling companies. That would put Starmer in Downing Street with a significant majority.
Tax policy took center stage during the campaign this week, with the two parties trading accusations about each other’s policies and record.
Neither Sunak nor Starmer are fighting the election with a credible tax policy, and whoever wins will likely have to break their promises not to increase taxes, according to an analysis by Bloomberg Economics.
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