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Rishi Sunak will on Tuesday announce a £2.4bn tax cut for pensioners, in a move intended to shore up the key Conservative “grey vote” and stabilise the party’s chaotic start to the general election campaign.
The UK prime minister will announce plans to unfreeze the personal allowance for pensioners, in a bid to stop millions of people who receive the basic state pension from being dragged into the tax system.
Sunak said the move would be worth £100 for 8mn pensioners next year, rising to about £300 a year by the end of the next parliament. “This bold action demonstrates we are on the side of pensioners,” he added.
The £2.4bn tax cut is likely to be well received by many Conservative MPs. The over-70s are the only age group more likely to vote Tory than Labour, according to a YouGov poll.
But Sunak’s campaign has run into trouble on multiple fronts, including criticism of his plan to spend £2.5bn on a revived national service scheme, with 18-year-olds asked to serve with the military for a year or carry out 25 days of unpaid compulsory “voluntary” work.
Steve Baker, Tory Northern Ireland minister, said in a post on X on Monday that the national service idea was “sprung on candidates, some of whom are relevant ministers”. The idea of teenagers in Northern Ireland serving with the British Army is highly political.
In a further indication of Conservative disarray, Lucy Allan, the departing Tory MP for Telford, was suspended from the party after backing Reform UK’s candidate for her constituency.
There are increasing tensions between Tory candidates and Conservative Campaign Headquarters, with some claiming that a CCHQ “toolkit” for designing election literature had crashed. A Tory official said the problem was shortlived and caused by “a provider”.
Tory HQ also admitted it had “in error” sent Conservative MPs an email that blamed them for failing to “get behind” the campaign and disclosed personal information — a mistake first reported by The Times.
“Calling the election on July 4 was meant to wrongfoot our opponents, but it seems to have wrongfooted us,” said one former Tory minister.
One minister said the campaign had “1997 written all over it”, a reference to the heavy defeat suffered by John Major to Tony Blair.
Sunak will hope that his new move to help pensioners will be welcomed by voters and put Labour on the defensive.
Under his plan, the personal allowance for pensioners would in future rise in line with the pensions “triple lock”, which guarantees increases in the state pension by the highest of earnings, wages or 2.5 per cent.
The Conservatives have frozen tax thresholds and allowances until April 2028. That has raised the prospect that the basic state pension of £11,540 could exceed the personal tax allowance of £12,570 by April 2027.
By raising the personal allowance for pensioners, the shift would remove the prospect of millions of people having to fill in tax returns and pay income tax on their pensions.
Paul Johnson, director of the Institute for Fiscal Studies, a think-tank, said he could not see a good case for giving pensioners a higher personal allowance than non-pensioners, but added: “I could see a case for having an allowance pegged to the state pension and moving up with it.”
Sunak will now challenge Labour to say whether it would match the policy, which he said would cost £2.4bn a year by 2029-30 and would be funded by a crackdown on tax avoidance and evasion — a popular source of apparent revenue for both parties.
But an air of gloom in the Tory camp persists. Lord Zac Goldsmith, a Tory peer, said on X the party was heading for defeat, adding: “The hope is that when Sunak disappears off to California in a few weeks, there are at least some decent MPs left around which to rebuild.”
Sunak, interviewed on ITV, said of Goldsmith’s comment: “It’s just simply not true.”
Asked if he intended to stay in Britain for years regardless of the result of the July 4 poll, the prime minister said: “Yes.”
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