Autumn Statement 2023: Tax cuts about long-term growth, not next election, claims chancellor
Chancellor Jeremy Hunt has insisted his tax cuts are about “long-term growth” for the economy, calling it “silly” to think they were instead about the timing of the next election.
The Conservative Party has been told to be ready for a general election from 1 January, a senior government source told Sky News’s political editor Beth Rigby, with a vote being called as early as May if Wednesday’s autumn statement goes down well with voters.
In his speech to the Commons, Mr Hunt announced a raft of measures that some see as a pre-election giveaway, including reducing national insurance for employees from 12% to 10% and scrapping it entirely for the self-employed.
But economists have pointed out that the overall tax burden will remain at a record high because of the continued freeze on tax thresholds.
Politics live: ‘Clear choice’ at next election, says Hunt
The chancellor told Sky News he hadn’t chosen “the most populist tax cuts”, with most of the policies aimed at boosting business growth.
But he denied the NI cuts were there to win over voters ahead of a campaign, saying: “It’s silly to think about this in terms of the timing of the next election. We’re trying to make the right decisions for long-term growth of the economy.”
The tax cuts came amid long-standing pressure from the Tory backbenches to reduce the burden on both the public and business, which has been sat at a 70-year high.
But a general election is also looming, with the government having to call the ballot by January 2025 at the latest, and the Conservatives are still lagging behind Labour in the polls.
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Hunt: It will ‘take time’ to lower taxes
A senior government source told Beth Rigby that the Tories’ campaign director, Issac Levido, is due to join the party’s headquarters on a full-time basis from the new year in order to make sure they are ready for the election as soon as possible.
Another senior source also told Sky News’ political editor that the plan was to “prepare for November” but be “ready for May”, in case the tax cuts help them narrow the gap, giving them a better chance of winning an historic fifth term in office.
But it also gives them an option if the measures go down badly on their own backbenchers and a confidence vote is called on Prime Minister Rishi Sunak’s leadership, allowing him to trigger a snap election.
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Mr Hunt defended the fact the tax burden had been so high in recent years, telling Sky News’ Kay Burley “it was right to help families” through COVID and the cost of living crisis, but that comes at a cost.
“I also think it’s right to make a start in bringing down taxes,” he added. “But the taxes that I brought down are not the crowd pleasers that were on the tip of everyone’s tongues, inheritance tax or income tax.
“They’re the taxes that are going to help businesses grow, and that is the way that we will increase our long term prosperity, raise wages, raise living standards. And that was the choice that a Conservative government made yesterday.”
He added: “What I do acknowledge is that we’re going to show discipline in public spending. It’s not going to grow in real terms as fast as some people would like.
“But that is happening because I’m choosing to cut taxes mainly for business, and to help businesses recruit more people.
“I accept that we are going to have to make difficult decisions, not do all the spending that everyone would want. But what I would say in the longer run is if you want to put more money into the NHS, you need a strong economy.”
The chancellor also attempted to draw a line in the sand between the Tories and Labour, adding: “What Conservatives say is the only way that we’ll increase prosperity for families up and down the country is by making businesses more competitive. It’s what economists call supply side measures.
“The Labour approach is to boost demand in the economy by raising borrowing by £28bn a year. I agree that has a short term impact, but the longer term result of increasing borrowing is more debt, higher debt payments, that means that taxes have to go up to pay for them, that makes our economy less competitive.
“So there is a very big difference between the Conservative approach and the Labour approach. And why, in the end, do people vote Conservative in elections? It’s because they trust us to make decisions for the long term growth of the economy. That’s what we did yesterday.”
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UK growth ‘a dead end’ under Tories
Giving her assessment of the autumn statement, Labour’s shadow chancellor, Rachel Reeves said there “wasn’t anything… that remotely compensates for the tax increases that we have had under the Conservatives these last four years” and the tax burden under the Tories was just set to increase.
Speaking to Sky News, she added: “In the end, how do you know if you’re better off? It’s your bank balance.
“And the truth is that this will be the first parliament ever where real disposable incomes are going to be lower at the end of it than they were at the beginning.
“People can see that when they look at their bank statements, when they log in to their bank accounts and see that the taxes that are being taken, the mortgage payments that are going out, the gas and electricity bills… that again are going to rise in January, all putting big pressure on the family finances and the tax increases that have already been announced [are more] than the chancellor gave back yesterday.”
UK
Woman’s body found in car boot in east London – as murder investigation launched by two police forces
UK
Police investigating criminal offence after Daily Telegraph columnist ‘dumbfounded’ by social media post probe
Essex Police say they are investigating an alleged criminal offence of inciting racial hatred, after Daily Telegraph columnist Allison Pearson said she was “dumbfounded and upset” when officers knocked on her door last Sunday.
Ms Pearson revealed she was told she was being investigated over a year-old deleted post online.
She said she wasn’t informed which post had been reported, but suggested it could have been related to the 7 October attacks in Israel or pro-Palestine marches.
She claimed the officers told her she was being investigated for a NCHI (a none crime hate incident) an incident involving an act which is perceived to be motivated by hostility or prejudice towards persons with a particular characteristic, but is not illegal.
NCHI reports have long been controversial, with many citing free speech concerns, and Ms Pearson’s account of the police visit has led to widespread support from Conservatives and online commentators, including Tory leader Kemi Badenoch.
But an Essex Police spokesperson has told Sky News its investigation was never for an NCHI, and that the matter was always being treated as an investigation into an alleged criminal offence of inciting racial hatred.
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Speaking on her Planet Normal podcast on Wednesday, Ms Pearson said she found the visit “chilling”.
“I was dumbfounded, upset, it’s not very nice,” she said. “I was in my dressing gown on the step of the house, these two coppers were there just outside the door.
“There were people gathering for the Remembrance Day parade so there were people watching from the other side of the road.
“Whatever I did or didn’t tweet, if somebody found it offensive, that to me is still not a reason for two policemen to come to my house on a Sunday morning.
“You know, they don’t do that for burglars, do they? We know policing is under-resourced and they are unable to attend often quite serious crimes.
“This was the most extraordinary overreach and state intrusion into my private life and I don’t think I did anything wrong and I think their response was outrageous.”
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In a statement, Essex Police said: “Officers attended an address in Essex and invited a woman to come to a voluntary interview.
“They said it related to an investigation into an alleged offence of inciting racial hatred, linked to a post on social media.
“For clarity: a complaint of a possible criminal offence was made to the police and this is why we called; to arrange an interview.
“Everyone was polite and professional throughout the brief conversation.”
They said an officer told Ms Pearson: “It’s gone down as an incident or offence of potentially inciting racial hatred online. That would be the offence.”
Essex Police say they have complained to the Independent Press Standards Organisation (IPSO) over what they call “false reporting” regarding the ongoing investigation.
In an interview with The Telegraph published yesterday, Kemi Badenoch said police visiting a journalist over a social media post was “absolutely wrong” and that “we need to look at the laws around non-crime hate incidents”.
“There has been a long-running problem with people not taking free speech seriously,” she said.
She challenged the prime minister to review the laws, saying: “Keir Starmer says he is someone who believes in these things. Now he needs to actually show that he does believe it. All we’ve seen from him is the opposite.”
Ms Badenoch added: “We need to stop this behaviour of people wasting police time on trivial incidents because they don’t like something, as if they’re in a nursery.
“It’s like children reporting each other. And I think that in certain cases, the police do it because they’re afraid that if they don’t do it, they will also be accused of not taking these issues seriously.”
Essex Police said the officers went to the address to invite Ms Pearson to attend a voluntary interview as part of their investigation, which was passed to them by another force.
“The report relates to a social media post which was subsequently removed,” the statement read.
“An investigation is now being carried out under Section 17 of the Public Order Act.”
Essex Police also said they made attempts to contact Ms Pearson before the visit.
Other prominent Conservative voices such as Boris Johnson, Liz Truss and Chris Philp have also leapt to Ms Pearson’s defence online, as has X owner Elon Musk, who quoted a post about the incident and said: “This needs to stop.”
Police commentator Graham Wettone told Sky News the police are “duty bound to investigate allegations of crime”.
“They’ve had an allegation of crime made there,” he said. “They will investigate it. If at the end of this they decide that no criminal offence has been committed – and we’re not at that stage yet – then it can still be recorded as a none crime hate incident.”
The police, he said, are duty bound to keep a record of none crime hate incidents.
“Parliament said they want the police to do this, to investigate and record incidents like this. So they are doing exactly what parliament and society asked them to do, and they are getting criticism for doing what people want.”
UK
Sir Keir Starmer vows to defend budget decisions ‘all day long’ as farmers slam ‘disrespectful’ PM
Sir Keir Starmer has said he will defend the decisions made in the budget “all day long” amid anger from farmers over inheritance tax changes.
Chancellor Rachel Reeves announced last month in her key speech that from April 2026, farms worth more than £1m will face an inheritance tax rate of 20%, rather than the standard 40% applied to other land and property.
The announcement has sparked anger among farmers who argue this will mean higher food prices, lower food production and having to sell off land to pay for the tax.
Sir Keir defended the budget as he gave his first speech as prime minister at the Welsh Labour conference in Llandudno, North Wales, where farmers have been holding a tractor protest outside.
Sir Keir admitted: “We’ve taken some extremely tough decisions on tax.”
He said: “I will defend facing up to the harsh light of fiscal reality. I will defend the tough decisions that were necessary to stabilise our economy.
“And I will defend protecting the payslips of working people, fixing the foundations of our economy, and investing in the future of Britain and the future of Wales. Finally, turning the page on austerity once and for all.”
He also said the budget allocation for Wales was a “record figure” – some £21bn for next year – an extra £1.7bn through the Barnett Formula, as he hailed a “path of change” with Labour governments in Wales and Westminster.
And he confirmed a £160m investment zone in Wrexham and Flintshire will be going live in 2025.
‘PM should have addressed the protesters’
Among the hundreds of farmers demonstrating was Gareth Wyn Jones, who told Sky News it was “disrespectful” that the prime minister did not mention farmers in his speech.
He said “so many people have come here to air their frustrations. He (Starmer) had an opportunity to address the crowd. Even if he was booed he should have been man enough to come out and talk to the people”.
He said farmers planned to deliver Sir Keir a letter which begins with “don’t bite the hand that feeds you”.
Farmers’ tractor protest outside the Welsh Labour conference in Llandudno, North Wales
Mr Wyn Jones told Sky News the government was “destroying” an industry that was already struggling.
“They’re destroying an industry that’s already on its knees and struggling, absolutely struggling, mentally, emotionally and physically. We need government support not more hindrance so we can produce food to feed the nation.”
He said inheritance tax changes will result in farmers increasing the price of food: “The poorer people in society aren’t going to be able to afford good, healthy, nutritious British food, so we have to push this to government for them to understand that enough is enough, the farmers can’t take any more of what they’re throwing at us.”
Mr Wyn Jones disputed the government’s estimation that only 500 farming estates in the UK will be affected by the inheritance tax changes.
“Look, a lot of farmers in this country are in their 70s and 80s, they haven’t handed their farms down because that’s the way it’s always been, they’ve always known there was never going to be inheritance tax.”
On Friday, Sir Keir addressed farmers’ concerns, saying: “I know some farmers are anxious about the inheritance tax rules that we brought in two weeks ago.
“What I would say about that is, once you add the £1m for the farmland to the £1m that is exempt for your spouse, for most couples with a farm wanting to hand on to their children, it’s £3m before anybody pays a penny in inheritance tax.”
Read more:
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Farmers ‘could block ports and disrupt food supply’
Welsh farmer Gareth Wyn Jones
Ministers said the move will not affect small farms and is aimed at targeting wealthy landowners who buy up farmland to avoid paying inheritance tax.
But analysis this week said a typical family farm would have to put 159% of annual profits into paying the new inheritance tax every year for a decade and could have to sell 20% of their land.
Keep up with all the latest news from the UK and around the world by following Sky News
The Country and Land Business Association (CLA), which represents owners of rural land, property and businesses in England and Wales, found a typical 200-acre farm owned by one person with an expected profit of £27,300 would face a £435,000 inheritance tax bill.
The plan says families can spread the inheritance tax payments over 10 years, but the CLA found this would require an average farm to allocate 159% of its profits each year for a decade.
To pay that, successors could be forced to sell 20% of their land, the analysis found.
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