RISHI Sunak today put long-awaited tax cuts at the heart of a new five-point plan to turbocharge the economy.
The PM laid out a blueprint to boost flatlining growth – saying Britain faces a “critical” choice ahead of Wednesday’s Autumn Statement.
1
His pledges also includes reducing debt, shoring up domestic energy supply, backing businesses and delivering a world-class education.
Tory MPs have been clamouring for tax cuts to win back squeezed voters – shouldering the highest burden since the war – ahead of next year’s election.
Answering their pleas he said today: “We will do that carefully, we will do that responsibly, but that time is now here.”
Making a major speech in North London today, Mr Sunak added: “Now that inflation is halved, we can turn our attention to cutting tax.
“We will reward work, by cutting taxes and reforming our benefits system so work always pays.”
But he remained tight-lipped about whether personal taxes like income and National Insurance will be slashed this week.
The PM insisted we “can’t do everything all at once” but promised: “But over time, we can and we will cut taxes.”
READ MORE ON POLITICS
He unveiled his new pledges after trumpeting success in hitting his first promise to halve inflation, now at 4.6 per cent.
Most read in News Money
The PM also took a swipe at Labour – saying Sir Keir Starmer and his top MPs have no clue about business.
And he accused the opposition of “rank hypocrisy” by promising sensible spending while also wanting to borrow £28billion.
In a major speech today he said: “The country faces a critical choice about how we grow the economy.
“Do we continue with the big government, high spending, high borrowing and high taxes that were necessary through the pandemic?
“Or, as we believe, should we change our approach and grow the economy through the dynamism of the private sector.”
He addressed voters ahead of Wednesday’s crucial Autumn Statement where tax cuts could finally come.
The PM is outlining the state of Britain’s economy and lay the groundwork for any imminent tax and spending changes.
With inflation now sitting at 4.6 per cent, Mr Sunak reassured Brits there is light at the end of the cost of living crisis tunnel is near.
The Autumn Statement is set to be one of the final chances for Mr Sunak and Jeremy Hunt to try and win over voters using economic policy.
It’s also a critical opportunity for the PM to placate frustrated backbenchers who are angry that the UK’s tax burden is at its highest since the Second World War.
Over the weekend Mr Hunt vowed to harness Britain’s entrepreneurial spirit to create a “fizzing” place to do business.
READ MORE MONEY NEWS
The Chancellor fuelled speculation it was time to cut business levies in a bid to boost growth after saying the tax burden was “too high”.
The move came as it emerged he was considering last-minute cuts to income tax and national insurance after being given extra spending power.
Mr Hunt told Sky News: “I think it’s important for a productive, dynamic, fizzing economy that you motivate people to do the work, to take the risks that we need.”
He outlined how his priority is to back British business adding that “lower tax is essential to economic growth”.
Mr Hunt expressed his frustration over too much negativity about the UK economy – saying the tech sector which will define the country for the next two decades is thriving.
He said: “There is a sort of defeatism. Actually, when you look at it, there’s a lot going for it.”
The Chancellor insisted yesterday that “everything was on the table” as it emerged he was looking at an income tax and national insurance reduction for workers despite fears it could hike inflation.
He said: “I want to show people there’s a path to lower taxes. But we also want to be honest with people, this is not going to happen overnight. It requires enormous discipline year in, year out.”
He also said: “If you want to bring down personal taxes the only way to do that sustainably is to spend public money more efficiently. Rome wasn’t built in a day, these things take time.”
Ministers are under pressure to hike the pensions triple lock by average earnings of 8.5 per cent rather than 7.8 per cent if you strip out bonuses.
Mr Hunt could also face fury if he increases benefits in line with the usual September rate of inflation which was 6.7 per cent or the lower 4.6 per cent, offering a saving £2 billion.
Shadow Chancellor Rachel Reeves said: “If you pick and choose from year to year which inflation number is the cheapest thing to do, then what you see is the gradual erosion of people’s incomes.”
