Rishi Sunak last night revealed he is planning a ‘gear shift’ on cutting taxes ahead of the next election.
In an interview with the Spectator magazine, the Prime Minister dropped a heavy hint that the Government will slash taxes again in the budget expected in March.
Mr Sunak said his priority was to ‘control spending and welfare so that we can cut taxes’. ‘We are in a position to be able to do all that because we have got inflation down,’ he said. ‘The economy has turned a corner and that means that there can be a gear shift in how we approach taxes.’
Chancellor Jeremy Hunt slashed National Insurance rates by 2p in last month’s autumn statement on the economy, delivering the biggest personal tax cut of recent times. Critics have pointed out that the UK is still heading for a record tax burden.
Rishi Sunak last night revealed he is planning a ‘gear shift’ on cutting taxes ahead of the next election
Chancellor Jeremy Hunt slashed National Insurance rates by 2p in last month’s autumn statement on the economy
Mr Sunak said: ‘I have always said I’m a Thatcherite in the truest sense. As Nigel Lawson and Margaret Thatcher said: Cut inflation, cut taxes. That’s what we’ve done. We have delivered more tax cuts in one fiscal event than at any point since the 1980s.’
Drawing a dividing line with Labour, he added: ‘The choice at the next election is between me and Keir Starmer. A Labour Party that wants to borrow £28billion a year is not going to control welfare or public spending. A Conservative Party is going to do those things – and cut your taxes instead.’
It came as a report found families are still feeling squeezed despite falling inflation.
A study by the Resolution Foundation think-tank found that even though inflation has fallen rapidly, soaring housing costs are adding to cost of living challenges.
The survey of more than 8,000 adults found 38 per cent reported that their financial situation had worsened between July and October, more than twice those (15 per cent) who saw improvements.
And 22 per cent said they were struggling to afford enough food.
It comes after figures yesterday showed a surprise 0.3 per cent slump in GDP in October, setting the scene for a bleak end to the year as Wall Street giants Goldman Sachs and JP Morgan cut their UK growth forecasts. One expert said it put the Prime Minister’s pledge to get the economy growing in jeopardy. Today the Bank of England is widely expected to leave interest rates on hold at its latest meeting.
But markets are increasingly convinced that cuts will start next year, despite Threadneedle Street officials trying to dampen those expectations. The Bank has hiked rates to 5.25 per cent over the past couple of years, helping to bring consumer price inflation down from 11.1 per cent last year to 4.6 per cent today.