British PM May Faces Smaller Election Win as Conservatives Stumble on Tax for Rich

LONDON (Reuters) —
The campaign bus of Britain’s Prime Minister Theresa May arrives for an election campaign event at Ultima Furniture in Pontefract, Thursday. (Reuters/Stefan Wermuth)

British Prime Minister Theresa May is on course to win Thursday’s election by a much smaller margin than previously predicted, opinion polls showed on Saturday, as her campaign stumbled again, this time over taxation for the wealthy.

In a sign of how far her snap election gamble has soured, May’s personal rating turned negative for the first time in a poll conducted by research firm Comres since she won the top job in the turmoil following the June 23 Brexit referendum.

Comres found the Conservative Party’s lead stood at 12 percentage points, unchanged from a week ago but far below the 21-point lead it recorded just before she called the election on April 18.

An Opinium poll for the Observer newspaper suggested May was set for a substantial parliamentary majority on June 8, though her lead over the opposition Labour Party has fallen to six percentage points from 19 points at the start of the campaign.

Just five days before polls open, May’s campaign sent conflicting messages on taxation for top earners, an issue which the Conservatives are sensitive about because the opposition Labour Party casts them as the party of the rich and privileged.

May insisted nothing had changed on her tax policy – she has kept open the possibility of tax rises – after her defense minister, Michael Fallon, was quoted by a national newspaper as saying that income tax would not increase for higher earners.

“Our position on tax hasn’t changed,” May said while on a visit to West Yorkshire in northern England.

“What people will know when they go to vote on Thursday is that it is the Conservative Party that always has been and is and always will be a low-tax party,” she said.

Her comments were echoed by her finance minister, Philip Hammond, though May has stoked speculation about Hammond’s future by refusing to say whether she will reappoint him if she wins the election.

Labour leader Jeremy Corbyn, a radical socialist who has run an unexpectedly strong campaign, said the Conservative leadership was in disarray.

“There’s complete chaos going on at the top of the government,” Corbyn told reporters.

When May stunned financial markets and political opponents by calling the snap election, her poll ratings indicated she could be on course to win a landslide majority on a par with the 1983 majority of 144 won by Margaret Thatcher.

But since then, May’s lead has been eaten away to as little as 3 percentage points, according to opinion polls, meaning she might no longer score the thumping victory she had hoped for ahead of this month’s launch of formal Brexit negotiations.

If she fails to handsomely beat the 12-seat majority her predecessor David Cameron won in 2015, her electoral gamble will have failed and her authority will be undermined both inside the Conservative Party and at talks with 27 other EU leaders.

The decline in support for the Conservatives coincided with a surprise announcement by May last month that she would make elderly people pay more for their social care, despite concerns that it could undermine support among aging, wealthy homeowners – a core source of Conservative votes.

May later softened the proposal by saying there would be a limit on the amount people would have to pay.

The Comres polling firm found May’s personal net approval rating had fallen to minus 3, down 12 points from a positive 9 point approval rating in February. Corbyn’s net personal rating was minus 15, up 18 points from a minus 33 score in February.

The latest confusion over income tax underscores the challenge facing the next government to meet the growing costs of public services at a time when Britain’s budget deficit remains large, and with Brexit-related uncertainty likely to weigh on the economy.

When May unveiled her election policies last month, she left open the possibility of higher income taxes by promising only that there would be no rises in value-added tax and dropping a Conservative pledge under Cameron – made in the 2015 election campaign – not to raise income tax, national insurance contributions or VAT.

The constraints of that pledge became clear earlier this year when May’s government tried to increase national insurance contributions on self-employed workers. It was then forced into a U-turn after Conservative lawmakers, wary of alienating small businesspeople, protested that it broke the 2015 pledge.

Labour said Fallon’s comments showed the Conservatives were protecting higher earners at the expense of the less well-off.

“The mask has finally slipped,” John McDonnell, a lawmaker who would be finance minister if Labour wins the election, said in a statement. “The only guarantee the Tories are prepared to give at this election is to big business and high earners.”

Labour has said it will raise income taxes on people earning more than £80,000 ($103,152) a year, while promising no increases for the other 95 percent of taxpayers.

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