With the Tory leadership contest now well underway, what are the current leadership rivals proposing on tax?
Six of the leading contenders have spoken about what they would like to see change in tax policy. Of the main runners and riders, only Andrea Leadsom seems not to have made any comment so far.
In his new campaign video, Boris Johnson, who is in pole position, suggests to one constituent that he could ‘cut some taxes' in order to 'get more money in’.
Sajid Javid proposes scrapping the top rate of income tax entirely. This would mean that the maximum tax rate would be 40 per cent, a cut of 5 per cent on the current position. In contrast, Dominic Raab wants to reduce the basic rate of tax by 5 per cent to 15 per cent over the term of the next Parliament.
Rory Stewart has wavered between reducing the basic rate and doing nothing.
Michael Gove and Jeremy Hunt have focused on reducing business taxes with the suggestion that the corporation tax rate should be cut from 19 per cent to 12.5 per cent.
It is no great surprise that although there is no consensus on how they will do this, there is a clear desire from most leadership candidates to cut taxes. Whoever wins the contest, we should expect the next Conservative leader to champion reducing the tax burden on individuals and on business.
In contrast, the 2017 Labour Manifesto pledged to raise more tax by charging tax at 45 per cent on income over £80,000 and re-introducing a 50 per cent tax rate from £123,000. The Manifesto also pledged to raise an additional £19.4bn from corporation tax.
Therefore, under a future Labour government some individuals and most companies will likely pay more tax. A future Conservative Prime Minister will seek to cut taxes payable by individuals and/or companies.
This philosophical difference to tax policy is now clearer than it has been for many years. Once the dust finally settles on Brexit, we may find ourselves looking at a political debate on tax cuts and public spending reminiscent of the 1980s.