Theresa May hints at scrapping Conservatives’ tax lock
PM signals she will change Cameron’s flagship policy if she wins
The prime minister has signalled she will scrap her predecessor David Cameron’s flagship “tax lock” policy if the Conservatives win the election, indicating that income tax and national insurance could rise.
Speaking in television interviews on Sunday, Theresa May ruled out a rise in VAT but said she did not want to make specific proposals on other taxes unless she was sure she could deliver on them.
Mrs May also hinted she would end the pensions “triple lock” — another key Cameron pledge. She said state pensions would continue to rise but added that the Tory manifesto would revisit the way this is calculated.
The Tories initially made their promises before the 2015 election, saying a tax lock would prohibit any rise in the income tax rate, VAT or national insurance, while the pensions triple lock would see the state pension rise in line with wages, inflation or by 2.5 per cent, whichever is highest.
The assurance, intended to put pressure on Labour, has become a millstone for the current government. Philip Hammond, the chancellor, was forced into an embarrassing retreat after trying to raise national insurance in this year’s Budget.
When questioned on her tax plans, Mrs May told BBC One’s Andrew Marr Show: “We have absolutely no plans to increase the level of tax but I’m also very clear that we don’t want to make specific proposals on taxes unless I’m absolutely sure that I can deliver on those.”
She added that her intention after the election would be to “reduce the taxes on working families”.
In a separate interview with ITV’s Peston on Sunday, Mrs May definitively ruled out a rise in VAT.
John McDonnell, the shadow chancellor, said it was wrong for Mrs May to drop the triple-lock formula and that he did not want to see pensioner incomes go backwards.
He also told Peston on Sunday that Labour would pledge not to raise VAT and there would be no tax rises for middle or low earners.
Earlier in the day, the prime minister also revealed plans to protect pensions from “unscrupulous” bosses.
The proposals, a response to the BHS pensions scandal, would increase the powers of the pensions regulator over company pensions and include fines for employers who “wilfully left a scheme under-resourced”.
In extreme cases, company directors could be struck off and corporate takeovers could be blocked where the solvency of the company scheme appears to be threatened.
The Tories will also consider a new law to make it illegal to intentionally or recklessly put a pension scheme at risk.
Mrs May said the plans would “ensure the pensions of ordinary working people are protected against the actions of unscrupulous company bosses”.
“Safeguarding pensions to ensure dignity in retirement is about security for families, and it’s another example of the choice in this election,” she added.