Rishi Sunak promises to reduce tax burden now inflation halved

Upbeat Rishi Sunak has promised tax cuts are finally on their way after meeting his pledge to halve inflation.

By Sam Lister, Political Editor based in the Westminster lobby

Rishi Sunak will introduce tax cuts

Rishi Sunak will introduce tax cuts (Image: UK Parliament_Jessica Taylor)

The PM promised that the Government “can and will” lower taxpayers’ burden but said any changes would be made “responsibly”.

Tory MPs have demanded help for workers and firms in tomorrow’s autumn statement after taxation levels hit a record high. However, Mr Sunak warned “We can’t do everything at once” as expectations increased about how generous any tax reforms might be.

In a speech marking the first of his five key pledges to voters being ticked off, the Prime Minister declared: “We can begin the next phase and turn our attention to cutting tax.”

Mr Sunak laid out five longer-term aims for the economy and public finances: reducing debt; cutting tax and rewarding hard work; building domestic, sustainable energy; backing British business, and delivering world-class education.

The Prime Minister suggested that alongside a reduction in the tax burden the Government would also seek to squeeze welfare spending by getting people back into work and clamping down on fraudsters.

Mr Sunak said he can move to the next phase of the Government’s economic plan after inflation fell to 4.6% in October.

The PM refused to give details of which taxes will be cut – but measures to help firms are the top priority, and he said “our focus is very much the supply side and growing the economy”.

He was speaking during a visit to a college in Enfield, North London with his Chancellor Jeremy Hunt, where they tried bricklaying. Mr Sunak added: “We will do this in a serious, responsible way, based on fiscal rules to deliver sound money and alongside the independent forecasts of the Office for Budget Responsibility.

“We can’t do everything all at once. It will take discipline and we need to prioritise. But over time, we can and we will cut taxes.”

Opinon poll tracker

Opinon poll tracker (Image: PA)

He said the Government had decided to “cut tax and reward hard work” – in a hint that income tax or National Insurance may be cut. The PM claimed that, if in power, Sir Keir Starmer and his Shadow Chancellor Rachel Reeves would continue the “big government, big spending approach” of the pandemic, borrowing up to £28billion a year for Labour’s green plans.

Mr Sunak added: “This makes the same economic mistake as last year’s mini-Budget: blowing tens of billions of pounds on unfunded spending is just as dangerous as blowing tens of billions of pounds on unfunded tax cuts.”

The Premier, who also opened the Global Food Security Summit in London yesterday, vowed to “clamp down” on welfare fraudsters in a drive to get more people into work.

He claimed that it was a “national scandal” that some two million people of working age were not in a job, adding: “It’s not sustainable for the country, for taxpayers, it’s not fair.

“We must do more to support those who can work to do so and we will clamp down on welfare fraudsters because the system must be fair for taxpayers who fund it.”

Paul Johnson, director of economic research body the Institute for Fiscal Studies, warned that Mr Hunt would be able to make only “a tiny cut” tomorrow.

He said: “There’s lots of speculation...there’s a little bit more room for manoeuvre. But that’s not real. It sounds like debt might be falling very slightly quicker in five years' time than he thought a few weeks ago. But that’s not really additional money. What he will have is a very very small number of billions of pounds to say, ‘Well I’m going to make a tiny cut here or a tiny cut there or something in the future.’”

Levelling Up Secretary Michael Gove revealed he had argued for “appropriate funding” for councils.

He told a local government conference he had been “doing my best to reinforce to the Treasury and to No10 some of the particular challenges that local government faces”.

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Councils and charities wrote to Mr Hunt yesterday saying it was “vital” he uses tomorrow’s update to provide more money for children’s services before they were “pushed to the brink”.

Meanwhile the Chancellor has revealed autumn statement plans to invest £20million into universities to encourage them to create “spin-out” companies on the back of the research they have conducted.

His message comes in the wake of the success of Oxford Nanopore, a biotech pioneer founded at Oxford University in 2005 and recently valued at £3.4billion.

Mr Hunt said: “Innovative, globally competitive businesses like Nanopore are making a huge contribution to our economy.” He added: “It’s critical we harness this potential and give universities the tools they need to translate cutting-edge research into exciting businesses that start and grow in the UK.”

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