Conservatives float tax cuts and help for first-time buyers to turn around dire polling

Rishi Sunak’s Conservative party is lagging far behind Labour in the polls (PA Wire)
Rishi Sunak’s Conservative party is lagging far behind Labour in the polls (PA Wire)

The Tories have been dropping hints they could make attention-grabbing pledges on housing and taxes as Rishi Sunak struggles to turn around his party’s major deficit in the polls.

Housing Secretary Michael Gove suggested to the Times that the Conservatives will promise to cut the up-front cost of a home for first-time buyers in a pre-election giveaway.

And the Prime Minister has ordered a “gear change” to reduce the historically high tax burden, possibly axing inheritance tax and reducing income tax, according to the Telegraph.

Both reports emerged as he struggles to turn the tide in favour of his party as Labour sits around 20 points clear in the polls.

The Times said that ministers are considering Government support for longer fixed-term mortgages to reduce the size of deposits for first-time buyers.

A resurrected help-to-buy scheme was also said to be on the table for the spring budget or the Conservative election manifesto.

According to the newspaper, Mr Gove believes longer-term fixed-rate mortgages could help first-time buyers but said rising interest rates and inflation fears had made such a move impossible in recent years.

He said: "We have been asking the question, how can we ensure that people with decent incomes who are finding it difficult because of the scale of the deposit required can get on to the housing ladder?

"I don't want to pre-empt anything...but it's about looking at some of the rigidities in the mortgage market which they haven't got in other jurisdictions."

Asked by the Times whether the Conservatives would be able to go into the election expected next year promising more help for first-time buyers, Mr Gove said: “Oh, yes, we must. Definitely.”

It comes as analysts predict UK house prices will fall in 2024, with the government's official forecaster tipping them to drop by nearly 5%.

Meanwhile, the Telegraph said senior figures in No 10 were considering a handful of major tax cuts as Mr Sunak comes under continued pressure from Tory MPs.

Cutting inheritance tax, in a move that would benefit the wealthy, would likely create a dividing line with Labour, which is unlikely to support such a cut.

Some Conservatives have however expressed opposition to the measure as most people suffer the burden of elevated costs after a sustained period of high inflation.

The Government has not commented on either of the newspaper reports.

The next general election must be held before the end of January 2025 but it is in Mr Sunak’s power when to call it. Most people in Westminster expect it to be held in the autumn.