Rishi Sunak promises to cut taxes as autumn statement looms
Rishi Sunak has promised he will cut taxes now the government has achieved its pledge to halve inflation by the end of the year.
The prime minister has been under pressure from many in his party to reduce the tax burden – which currently sits at a 70-year high – ahead of the next election, and rumours have been swirling that such policies could be announced in the autumn statement on Wednesday.
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Making a speech in north London on his economic plans, Mr Sunak said his “argument has never been that we shouldn’t cut taxes – it’s been that we can only cut taxes once we have controlled inflation and debt”.
And with the change in inflation – confirmed last week by the Office for National Statistics (ONS) to have dropped to 4.6% – it was time for the government to “begin the next phase” of its plan and “turn our attention to cutting tax”.
The prime minister did not reveal what taxes would be for the chop, but they are expected to be confirmed on Wednesday when Chancellor Jeremy Hunt delivers his statement in the Commons.
Can the chancellor lift the gloom? Watch live coverage on Sky News of the autumn statement from 11am on Wednesday.
During his speech, Mr Sunak celebrated the fall in inflation – though it still remains more than double the Bank of England target of 2% – saying it showed “when we make a major economic commitment, we will deliver it”.
Then moving on to the big question ahead of the autumn statement, he said: “I want to cut taxes, I believe in cutting taxes, what clearer expression could there be of my governing philosophy than the belief that people, not government, make the best decisions about their money.
“But doing that responsibly is hard. We must avoid doing anything that puts at risk our progress of controlling inflation, and no matter how much we might want them to, history shows that tax cuts don’t automatically pay for themselves.
“And I can’t click my fingers and suddenly wish away all the reasons that taxes had to increase in the first place – partly because of COVID and Putin’s war in Ukraine, and partly because we want to support people to live in dignity in retirement with a decent pension and good health care which will cost more as the population ages.”
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But the prime minister added: “Now that inflation has halved and our growth is stronger, meaning revenues are higher, we can begin the next phase and turn our attention to cutting tax.”
The prime minister said the government “can’t do everything at once”, and it would take “discipline” to “prioritise” what should be reduced.
However, he promised to make the reductions “in a serious, responsible way, based on fiscal rules”, adding: “Over time we can and we will cut taxes.”
Sunak’s argument has flaws – he’ll have to work hard to win it
Well, that was wild. Today, Rishi Sunak appeared to have perfected the art of the low-key big speech.
The prime minister announced tax cuts are coming right now, set out the five long-term priorities he’ll fight the election on and made his most aggressive attack on the Tory right’s belief in self-funding tax cuts.
All done on a hugely busy political day, competing with the COVID inquiry, CBI annual conference featuring the chancellor, an AI event with the deputy prime minister on the day a refreshed plan for foreign aid spending was being released and Lord Cameron’s formal arrival in the Lords.
At the heart of Sunak’s speech was an argument that having reduced inflation and debt, now everyone can share in the rewards. A prime minister – justifiably – wanting to share some of the credit for Wednesday’s tax cut announcement in the autumn statement.
This is his argument: “We could only cut taxes once we’ve controlled inflation and debt… and the official statistics show that promise has now been met.”
There are there problems with this statement from the prime minister. The first is that he has met only one, not both of his inflation targets – his government’s other is to get it back down to 2%, and at 4.6% it’s still very high by the standards of the last 20 years.
Secondly, debt is not going down – in absolute terms it is rising. Sunak means, but does not say, that debt is falling as a proportion of GDP, a slight of hand that matters.
Thirdly, he is boasting about growth, saying: “Our growth is stronger.” Yes, stronger than the March budget, but the last quarterly GDP figures came in at 0.0%, nil growth, and the latest indications from business point to all but no growth and maybe even recession in the coming months.
Instead what has changed is circumstance – the election, even at its furthest away point, is getting closer, while his colleagues are circling on a range of topics and he feels more unstable than at any point since the start of the year after the Rwanda court defeat.
This is an argument he is going to have to work very hard if he wants to win.
Read more:
What chancellor could announce in autumn statement
Over the weekend, Mr Hunt insisted the focus of the upcoming budget would be on growth for business, telling Sky News he wanted to help create a “productive, dynamic, fizzing economy”.
But the chancellor also said “everything is on the table” when asked about swirling rumours over possible tax cuts.
Sky’s deputy political editor Sam Coates understands taxes on personal incomes will fall in Wednesday’s statement, as the government also seeks to help households with the cost of living crisis.
In the latest edition of the Politics at Jack and Sam’s podcast, by Sky News and Politico, he said the cut was unlikely to be on the basic rate of income tax though.
Click to subscribe to Politics at Jack and Sam’s wherever you get your podcasts
However, the head of the Institute for Fiscal Studies, Paul Johnson, warned there was “no headroom there at all” for major tax cuts.
The economist said chancellors could “always find a few billion in a budget or an autumn statement if they want to”, but the public finances were “in such a mess” due to the amount being spent on debt interest, that there wasn’t a lot of wriggle room for Mr Hunt.
During his speech, Mr Sunak also promised to “clamp down” on welfare fraudsters, calling it a “national scandal” and “an enormous waste of human potential” that around two million people of working age were not in employment.
The government is said to be considering a big squeeze on benefits in order to find savings, effectively cutting working age welfare payments for millions of people.
The prime minister said: “We believe in the inherent dignity of a good job, and we believe that work, not welfare is the best route out of poverty.
“So 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.”
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Chancellor: ‘Tax burden is too high’
Mr Sunak also used his speech to launch an attack on Labour for having “no experience” in business, and accused Sir Keir Starmer and the shadow chancellor Rachel Reeves of offering “fairy tale” answers to the questions of how to grow the economy.
But Labour’s national campaign coordinator, Pat McFadden, said: “The Tories have failed to deliver on so many pledges from the past. Why should people believe they will deliver on pledges for the future?
“It sums up this Conservative Party to claim things will be better tomorrow when they can’t even fix the problems of today.”
Police have appealed for information after a man was charged with murdering two women and raping a third.
Simon Levy has been charged with murdering 53-year-old Carmenza Valencia-Trujillo who died on the Aylesbury Estate, south-east London, on 17 March, the Metropolitan Police said.
In September, Levy, of Beaufoy Road, Tottenham, north London, was charged with murdering 39-year-old Sheryl Wilkins who was found unresponsive in High Road, Tottenham, on 24 August.
He is also accused of grievous bodily harm with intent, non-fatal strangulation and two counts of rape against a third woman, who cannot be named for legal reasons, in Haringey, north London, on 21 January, police said.
The 40-year-old will appear at Westminster Magistrates’ Court on Tuesday charged with Ms Valencia-Trujillo’s murder.
Sheryl Wilkins was found unresponsive in High Road, Tottenham, on 24 August. Pic: Metropolitan Police
He is also due to appear at the Old Bailey on Wednesday for a plea and trial preparation hearing for the murder of Ms Wilkins.
Detectives believe there may be individuals who have information relevant to this investigation – or who are yet to report incidents which have directly impacted them – and are asking for people to come forward.
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UK
Family of woman killed 56 years ago, in a case of mistaken identity, believe her remains are buried in a garden
A new “national day” to honour victims and survivors of terrorism will be added to the calendar from next year, it has been revealed.
The annual commemoration will fall on 21 August, and will be marked in a different place each year to recognise the widespread impact of terrorism around the country.
It comes after a 12-week public consultation showed 91% supported the plan for a national day, and 84% strongly supported the proposal.
Flowers left in St Ann’s Square, Manchester, to remember the Manchester Arena terror attack. Pic: PA
How the day will look, including a final name and symbol, will be worked out collaboratively between survivors and ministers, according to the Home Office.
But it will “honour and remember victims and survivors of terrorism”, encouraging survivors to access specialist support, spotlighting their stories, and educating the public.
A spokesperson for the Home Office confirmed that it would not be a bank holiday.
Jo Berry, whose father Sir Anthony Berry was killed in the IRA Brighton hotel bombing in 1984, said victims of terrorism would no longer be “a footnote of history”.
Jo Berry, whose father was killed in the Brighton bombing in 1984, with convicted bomber Patrick Magee in 2004. File pic: PA
She said: “What we remember as a nation matters. It sends a signal about what we value.
“For too long, survivors of terror attacks, and those who have been killed in them, have been a footnote of history. Survivors have felt ignored and forgotten.
“That’s why Survivors Against Terror launched a campaign for a new national day of memorial three years ago.”
Read more:
Referrals to UK counter-terrorism programme reach new high
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Travis Frain, who survived the Westminster Bridge attack in 2017, also backed the campaign.
He said: “A national day would provide an opportunity to remember those we have lost, to pay tribute to the bravery and resilience of those who have survived these heinous acts, and for us to look forward to the future to educate the next generation.”
The date was chosen to coincide with the UN International Day of Remembrance and Tribute to the Victims of Terrorism.
Plans have also been announced for a new support hub to help victims in the aftermath of terror attacks.
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