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.”
Business
In Halifax’s night-time economy, no one is holding back over what is required in the budget
In the upstairs bar of a slick new brewery, the cheese-lovers of Halifax are paying “homage to fromage”.
It is one of the first events in the historic West Yorkshire town for the monthly cheese club and there is a decent turn-out.
Sky News visited Halifax’s clubs, bars and restaurants to get an insight into people’s priorities
The night-time economy in Halifax is a useful measure of how the landscapes of our town and cities have changed
Discussion of Wednesday’s budget is not as popular as an accompaniment to the cheese as the selection of wines. But no one holds back on what is required of the chancellor.
Natalie Rogers, who runs her own small business with her partner, said there needs to be focus.
Small business owner Natalie Rogers wants to see more investment in local industries
“I think investing in small businesses, investing in these northern towns, where at one time we were making all the money for the country, can we not get back to that? We’re not investing in local industries.”
At the next table, with a group of friends, Ali Fletcher said there needs to be bigger targets.
“I think wealth inequality is a major problem. The divide is getting wider. For me, a wealth tax is absolutely critical. We need to address this question of ‘Is there any money left?’. There’s plenty of money, it’s all about choices that government make.”
At this monthly cheese club, people told us about their priorities ahead of the budget
The evening’s cheese tasting was being marshalled by Lisa Kempster. “The impression I get from talking to people is there’s a lot of uncertainty, but when you ask them what they’re uncertain about, they’re not really sure, there’s just a general feeling of uncertainty and being cautious.”
Ali Fletcher reckons wealth inequality is a major problem
Read more:
Budget will be big – and Starmer has some serious convincing to do
Reeves vows to ‘grip the cost of living’
What tax rises could chancellor announce?
This corner of Halifax, close to the town’s historic Piece Hall, is buzzing with clubs, bars and restaurants, trying hard to defy the crunch in the night-time economy. It is a useful measure of how the landscapes of our town and cities has changed.
“Whenever there’s a budget, for a few days afterwards, there’s a drop off in trade,” said Michael Ainsworth, owner of the Graystone Unity, a bar and music venue in the town.
“I accept the government needs to raise money but, in this day and age, there’s better ways to go about doing that, like closing tax loopholes for the huge businesses to operate up with banking arrangements outside the UK.”
Michael Ainsworth owns a bar and music venue and thinks the chancellor needs to close tax loopholes
In the bar, a folk singer is going through a quirky and caustic set. In the basement, a punk band called Edward Molby is considerably louder.
On a sofa in the main bar, recent graduates Josh Kinsella and Ruby Firth, newly arrived in Halifax because of its more affordable housing, pinpoint what they want on Wednesday.
“Can we stop triple-locking the pensions, please? Stop giving pensioners everything. For God’s sake, I know they have hard times in the 70s and the 80s, but it just feels like we’re now paying for everyone else.”
Josh Kinsella and Ruby Firth feel there’s too much focus on pensioners
Ben Randm is a familiar face at the bar and well known on the music scene with his band, Silver Tongued Rascals.
“Everyday people are seen as statistics, we’re always the afterthought. When the cuts are done, we’re always impeded and the ramifications that has for people’s livelihoods, for people’s mental health, for people’s passion and drive… it’s such a struggle.”
He, like many in the night-time economy sector, wants extra help for hospitality and venues that, he says, provide a vital community link.
Ben Randm who has his own band reckons everyday people are ‘always the afterthought’
David Van Gestel chose Halifax to open the third branch of MAMIL, a bar in jokey honour of those cycling “middle-aged men in Lycra”. On a busy quiz night, he said venues had to provide something different to get people out of their homes.
“I think the government needs to start putting some initiatives in place. They talk about growth but the reality is that the only thing we’re seeing grow is our costs.”
There’s a lot going on at TikTok right now.
As well as online safety updates and new features, the company is introducing sweeping changes to how it moderates the platform’s content.
At the same time, there’s an intense focus on online safety, particularly here in the UK.
With all that going on, Sky News got a rare, exclusive sit-down with one of TikTok’s senior safety executives, Ali Law.
The increasing role of artificial intelligence
One of the biggest changes happening at TikTok is around artificial intelligence.
Like most social media companies, TikTok has used AI to help moderate its platform for years – it is useful for sifting out content that obviously violates policies, and TikTok says it now removes around 85% of violative content without getting a human involved.
File pic: Reuters
Now, it is increasing its use of AI and will be relying less on human moderators. So what’s changed that means TikTok is confident AI can keep young users safe?
“One of the things that has changed is really the sophistication of those models,” said Mr Law, who is TikTok’s director of public policy and government affairs for northern Europe. He explained that AI is now better able to understand context.
“A great example is being able to identify a weapon.”
Whereas previous models may have been able to identify a knife, newer models can tell the difference between a knife being used in a cooking video and a knife in a graphic, violent encounter, according to Mr Law.
“We set a high benchmark when it comes to rolling out new moderation technology.
“In particular, we make sure that we satisfy ourselves that the output of existing moderation processes is either matched or exceeded by anything that we’re doing on a new basis.
“We also make sure the changes are introduced on a gradual basis with human oversight so that if there isn’t a level of delivery in line with what we expect, we can address that.”
Human moderator jobs being cut
That increasing use of AI means TikTok will rely less on its network of tens of thousands of human moderators around the world.
TikTok moderators and union workers protested outside the company’s London headquarters over job cuts
In London alone, the company is proposing to cut more than 400 moderator jobs, although there are reports a number of those jobs will be rehired in other countries.
On 30 October, Paul Nowak, general secretary of the TUC union, said “time and time again” TikTok had “failed to provide a good enough answer” about how the cuts would impact the safety of UK users.
Ali Law speaks to Sky News from TikTok’s European headquarters in Dublin
When Sky News asked if Mr Law could ensure UK users’ safety after the cuts, he said the company’s focus is “always on outcomes”.
“Our focus is on making sure the platform is as safe as possible.
“We will make deployments of the most advanced technology in order to achieve that, working with the many thousands of trust and safety professionals that we will have at TikTok around the world on an ongoing basis.”
Dame Chi Onwurah speaks at the House of Commons. File pic: Reuters
The UK’s science, technology and innovation committee, led by Labour MP Chi Onwurah, has issued a probe into the cuts, with Ms Onwurah calling them “deeply concerning”.
She said AI “just isn’t reliable or safe enough to take on work like this” and there was a “real risk” to UK users.
However, Mr Law said that, as a parent himself, he is “also highly concerned and highly interested in issues of online safety”.
“That’s why I’m so confident in the changes that we are making at TikTok in terms of content moderation as a whole,” he said.
“The power really comes in the combination of the best technology and human experts working together, and that still is the case at TikTok and it will be going forwards as well.”
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UK’s online safety rules: One month on
New wellness tools
The interview came at the end of an online safety event at TikTok’s Dublin office, its European headquarters.
During the conference, the company announced a number of new features designed to increase user safety, including a new in-app Time and Wellbeing hub for TikTok users.
The hub is designed with the Digital Wellness Lab at Boston Children’s Hospital and gamifies mindfulness techniques like affirmations, not using TikTok during the night and lowering your screentime.
Ali Law, TikTok’s director of public policy and government affairs for northern Europe
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Cori Stott, executive director of the digital wellness lab, said many people use their phones to “set their wellbeing, to reset their emotions, to find these safe spaces, and also to find entertainment”.
The hub was built as part of the TikTok app because young people want wellness tools “where they already are”, without needing to go to a different app, she said.
Still, there are plenty of reports suggesting that phone use and social media has a damaging effect on young people’s mental health… is TikTok trying to solve a problem of its own creation?
“If you are a teen on the app, you will load up and find that you have, if you’re under 16, a private profile, no access to direct messaging, a screen time limit set at an hour, [and at] 10pm sleep hour suggestion,” said Mr Law.
“So the experience is one that does try and promote a balanced approach to using the app and make sure that people have the options to set their own guardrails around this,” he said.
“I think the other thing I’d say is that the content on TikTok is, in the main, inspiring, surprising, creative.”
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