It is no secret that Chancellor Rishi Sunak is under a lot of pressure from the public and Treasury officials as the due date for Budget nears. With the Conservative Party adamant on its 2019 manifesto not to increase rates for five years, Sunak has reportedly agreed to maintain their so-called triple tax lock. It prevents him from raising income, national insurance or value added tax.
The Financial Times reported that Sunak has agreed with Prime Minister Boris Johnson that he will hold the triple tax lock, forcing him to increase other taxes such as corporation tax, and capital gains tax to combat the UK's growing deficit. Treasury figures had reportedly said they wanted Sunak to abandon the pledge, considering he spent roughly £280bn fighting the impact of Covid-19. The FT quoted a source as saying, “To go back on the manifesto pledge would be a betrayal of trust, pandemic or no pandemic. It was a very significant pledge at the last election.”
Sunak had previously shown indications to ditch party promises. He had abandoned a Tory pledge to devote 0.7 per cent of GDP to overseas aid in November's spending review. In his upcoming Budget scheduled for March 3, the Chancellor is expected to announce only limited tax hikes. A second Budget is scheduled for November.
