Tories Propose Help to Buy Revival and £13bn Tax Cuts in New Manifesto

In a move that has sent tremors throughout the UK's financial landscape, Prime Minister Rishi Sunak is rumoured to be set to announced plans to abolish inheritance tax (IHT) at the Conservatives Party conference next month.

Prime Minister Rishi Sunak is set to revitalise his campaign with a Conservative manifesto focused on significant tax cuts and support for first-time home buyers.

Sunak emphasises that it is “morally right” to reward hard work, positioning himself as a successor to Margaret Thatcher and Nigel Lawson.

Key Points of the Conservative Manifesto

£13bn in Tax Cuts:

The manifesto outlines plans for more than £13 billion in tax cuts, targeting earners, parents, and pensioners. These cuts will be funded by overhauling the welfare system and cracking down on tax avoidance. Among these measures is a proposed 2p reduction in national insurance.

Help to Buy Revival:

Sunak will introduce a new £1 billion scheme to assist first-time buyers, enabling them to purchase homes with just a 5% deposit. This scheme, inspired by the previous Help to Buy initiative, will be available for properties under £400,000. The previous scheme had limits of £250,000 outside London and £450,000 in the capital.

Stamp Duty Abolishment:

The Tories plan to permanently abolish stamp duty for first-time buyers on properties up to £425,000. Sunak asserts that this move will help build an “ownership society,” giving more people the security and pride of home ownership.

Sunak’s Vision

Sunak articulates a vision where working individuals can retain more of their earnings, contrasting this with Labour’s approach. He states, “Keir Starmer takes a very different view. He says he’s a socialist, and we know what socialists always do: take more of your money.”

Sunak highlights the Conservative Party’s commitment to sound money management, aligning with the legacies of Thatcher and Lawson. He stresses the importance of rewarding hard work by allowing people to keep more of their own money and reducing welfare dependence to lower taxes.

Responding to Housing Challenges

In a BBC interview, Sunak acknowledged the increasing difficulty of home ownership in recent years. He promised not only to build homes in suitable locations but also to support young people in securing well-paying jobs to save for deposits.

The new Help to Buy scheme will offer a 20% government equity loan towards new-build properties, allowing first-time buyers to secure homes with a 5% deposit. This scheme will run for three years, with no interest payable on the government equity part of the loan for the first five years. Developers will contribute a quarter of the equity loan costs.

Labour’s Competing Proposals

Labour has also proposed measures to assist first-time buyers, including making the current mortgage guarantee scheme permanent. This scheme, set to end in June next year, sees the government acting as a guarantor for part of a home loan, encouraging lenders to offer low-deposit deals. Labour claims their plan would help over 80,000 young people onto the housing ladder over the next five years.