More tax cuts to come? Sunak hints National Insurance cut was just the 'start of a journey'
25 November 2023, 21:38
Rishi Sunak has said this week's cut to National Insurance was just the "start of a journey", hinting more tax cuts could be on the way.
Listen to this article
Loading audio...
Mr Sunak said his Chancellor Jeremy Hunt's cut to NI shows the government is 'shifting gears' on fiscal policy, after Brits have been forced to grapple with soaring inflation.
"I always said I wanted to cut people's taxes, but first we had to get inflation under control and stabilise the economy," the prime minister told the Mail on Sunday.
"We have now done that and it didn't happen by accident. The Chancellor and I took a set of decisions that weren't easy, that we got a lot of flak for, that the Labour party opposed, in order to halve inflation and defy the sceptics.
"Everyone said we were going to have a recession this year in the UK [but] we have actually grown the economy, Because of that our economic policy can shift gears."
Mr Sunak added that the Chancellor's Autumn Statement was just the "start of a journey" and that the government will "do more when we can".
"I want to cut taxes, reward hard work, grow the economy and do so in a way that is responsible," he said.
In this week's Autumn Statement, Mr Hunt announced that the main 12 percent rate of National Insurance will be cut by two percent from January 6.
This will save workers, on average, £450 a year.
The national living wage will also see a 9.8 percent increase to £11.44 in April.
Pensions, meanwhile, will go up by £924 per year, while benefits will rise by £460, on average, for over five million households next year.
However, while taxes have been cut, the tax burden on the British people is still forecast to reach its highest level since the Second World War.
The government's decision to freeze tax thresholds between 2022 and 2028 will raise nearly £45 billion, according to the Office for Budget Responsibility, (OBR).
National Insurance cuts: How much more money will you take home each month?
What the Autumn Statement means for you: How tax cuts will boost your wallet
According to their predictions, four million people will be made to pay the 20p basic rate of income tax by 2028, as incomes rise but thresholds remain the same.
Meanwhile, another three millions Brits will fall into the higher 40 percent rate of income tax, while around 400,000 will fall into the top rate of 45 percent.
More people being pushed into the tax system after receiving a pay rise is known as "fiscal drag" and raises tax income for the government.
