• Rishi Sunak pledges to cut basic rate of income tax by 20% by 2029.
• Former finance minister trails Liz Truss in race to become UK’s next prime minister.
• Sunak says he will fund tax cut by growing economy and being fiscally responsible.

Rishi Sunak, who is trailing in the race to become Britain’s next prime minister, has pledged to cut the basic rate of income tax by 20% by 2029, in a potentially game-changing move by the former finance minister.

Sunak, who was once considered the favourite to succeed Boris Johnson as Foreign Secretary when he helped steer the economy through the ravages of the COVID-19 pandemic, has struggled against Foreign Secretary Liz Truss, who has promised immediate tax cuts.

Sunak said he was still focused on reducing inflation, but once that was accomplished, he would carry out an already-announced plan to cut 1 pence from income tax in 2024, and then another 3 pence by the end of the next parliament, likely around 2029.

The two pledges would reduce income tax from 20 pence to 16 pence.

Sunak claimed that the plan would be the largest income tax cut since Margaret Thatcher’s time.

“It is a radical vision, but it is also a realistic one,” he said in a statement late Sunday, a day before Conservative Party members were supposed to begin receiving ballot papers to vote for the party’s new leader.

Sunak told BBC Radio on Monday that he would fund the tax cut by growing the economy and being fiscally responsible.

Britain’s search for a new prime minister began on July 7, when Johnson was forced to resign after months of scandal. Conservative lawmakers have narrowed the field of candidates to Truss and Sunak, with a decision by party members expected on September 5.

The economy dominated the early stages of the contest, with Sunak arguing that Truss’s plan to reverse a rise in social security contributions and cancel a planned increase in corporation tax would fuel inflation even more.

“I don’t think going on a borrowing binge at a time when inflation and interest rates are already on the rise would be prudent,” Sunak said.

Sunak estimated that each penny cut in income tax rates would cost around 6 billion pounds ($7.3 billion) per year, a figure that would still allow Britain’s debt-to-GDP ratio to fall if the economy grew at the official forecasted rate.

Truss has argued that tax cuts are urgently needed to jump-start the economy. According to a recent YouGov poll, Truss leads Sunak by 24 points among Conservative Party members.

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