UK’s Sunak promises tax cuts for pensioners as Tories face election wipeout | Business and economy

The opposition Labor Party calls the election promises the ruling party’s latest “desperate move”.

British Prime Minister Rishi Sunak has pledged to cut taxes for millions of pensioners as he seeks to reverse his Conservative party’s dismal poll results ahead of July’s general election.

Under the plans announced Monday, the tax-free allowance for retirees would increase by at least 2.5 percent, in line with the highest average salary or inflation.

The proposals would see some 8 million pensioners pay around 100 pounds ($128) less in tax in 2025 and around 275 pounds less per year from 2030.

Under the triple lock introduced by the Conservatives in 2011, the state pension is already increasing either by 2.5 percent or by average earnings – whichever is higher – but the tax thresholds on income have been frozen since 2021.

The opposition Labor Party, widely tipped to take power after 14 years in opposition, has pledged to maintain the triple lock guarantee for at least five years if elected.

Sunak said “this bold action” showed his party was on the side of pensioners.

“I passionately believe that those who have worked hard all their lives should have peace of mind and security in retirement,” he said.

Labor Shadow Paymaster General Jonathan Ashworth called the announcement “another desperate measure from a chaotic Conservative Party burning down any remaining facade of its pretensions to economic credibility”.

“Not only have they promised to spend tens of billions of pounds since this campaign began, but they also have a completely unfunded policy of 46 billion pounds ($59 billion) to scrap national insurance which threatens very basis of state pensions,” Ashworth said.

After months of speculation, Sunak called elections for July 4 on Wednesday, months earlier than most observers expected.

Opinion polls have for months shown the Conservatives trailing Labor by around 20 percentage points, amid voter discontent over high inflation, weak economic growth and a series of political scandals.

Some polls suggest the Conservatives are on course for their worst electoral defeat in history, surpassing their loss of 178 seats in 1997 under John Major.

A record 78 Conservative MPs have announced they will not stand in the election, including the likes of Housing Secretary Michael Gove and former Prime Minister Theresa May.