Stamp duty could be slashed for millions of Britons as Rishi Sunak's Tories look to bounce back from two disastrous by-election results, a report has claimed.
The Conservatives lost in both Mid Bedfordshire and Tamworth on Thursday as Sir Keir Starmer's Labour Party looks likely to steamroll to victory at the next general election.
Labour won the two polls with swings of more than 20 percentage points, leaving buoyant Southside insiders hailing the results as a "political earthquake".
The swings could put Starmer in Downing Street with a 1997-style landslide if repeated across the country.
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The Prime Minister and his Chancellor Jeremy Hunt have so far rejected calls to cut tax in the autumn statement.
However, senior Tories are considering offering a stamp duty cut in the party's election manifesto.
The announcement will likely only come if the economy continues to turnaround, The Times has claimed.
A second major tax cut could come if the Conservative Party decide to abolish inheritance tax.
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Prime Minister Rishi Sunak speaks to members of the public during a visit to Clacton-on-Sea
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Either idea, which would be considered a pivot back to tax-cutting Tory principles, could boost support for Sunak in the opinion polls.
A Conservative source suggested reducing stamp duty would be "aspirational" and boost the economy by supporting housing market sales.
Official figures released in January found residential stamp duty raised around £10.1billion for the Treasury in 2021/22.
The total is understood to have fallen considerably in recent months.
Labour leader Sir Keir Starmer at the Forest Centre in Marston Moretaine, Bedfordshire after newly elected Labour candidate Alistair Strathern won the Mid Bedfordshire by-electionn
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In contrast, revenues for inheritance tax have continued to increase to approximately £6billion.
A Tory source told The Times: "Cutting stamp duty would cost a lot of money but it is not a good tax because it disincentives people from moving, which is not good for the economy."
However, it has been suggested that cutting the levy could be negated by sellers putting up prices.
Sunak's leadership is facing its most significant challenge since entering Downing Street last year following defeat in Mid Bedfordshire and Tamworth.
A new house build in Larbert
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Alistair Strathern overturned a bigger majority than any other Labour candidate since 1945 to win ex-Culture Secretary Nadine Dorries' once-safe seat in a tightly-contested three horse race.
Sarah Edwards' victory in Tamworth, once the constituency occupied by former Prime Minister Robert Peel, will likely send shockwaves through CCHQ as Tony Blair won the seat just months before his 1997 victory.
But the Prime Minister was keen to stress how "mid-term elections are always difficult for incumbent governments".
Starmer hailed the victory as an example of the country wanting change, adding: "Winning in these Tory strongholds shows that people overwhelmingly want change and they’re ready to put their faith in our changed Labour Party to deliver it."