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Sunak promises tax cuts ahead of crunch autumn statement
20 November 2023, 12:44
The Prime Minister said it would take discipline and the Government would need to decide which cuts to prioritise.
Rishi Sunak has hinted at business tax cuts to boost economic growth as he promised to reduce the tax burden “carefully and sustainably”.
The Prime Minister declined to give any specifics ahead of Wednesday’s autumn statement, but stressed that the focus is “very much the supply side” of the economy in a signal that business tax cuts are more likely than personal ones.
Mr Sunak said he was able to move on to the “next phase” of the Government’s economic plan after inflation fell to 4.6% in October.
He said he was taking “five long-term decisions” for the economy and public finances.
They would focus on reducing debt, cutting tax, building sustainable energy, backing British businesses and delivering world-class education.
In a speech at a London college, he said: “We will do this in a serious, responsible way, based on fiscal rules to deliver sound money, and alongside the independent forecasts of the Office for Budget Responsibility.
“And we can’t do everything all at once.
“It will take discipline and we need to prioritise.
“But over time, we can and we will cut taxes.”
He repeatedly refused to “pre-empt” any decisions ahead of the financial statement, but said: “We will prioritise, we will be disciplined and our focus is very much the supply side and growing the economy.”
Although Mr Sunak has met his own pledge of halving inflation in 2023, the rate of the Consumer Prices Index is still well above the Bank of England’s 2% target.
The prospect of tax giveaways comes ahead of a general election expected next year and with the Tories seeking a boost to turn around opinion polls which have shown consistent Labour leads.
The Prime Minister contrasted his approach to the public finances with that of Labour and his predecessor Liz Truss.
He claimed Sir Keir Starmer and Rachel Reeves wanted to continue the “big government, big spending approach” of the pandemic, with up to £28 billion of borrowing a year for Labour’s green plans.
“This makes the same economic mistake as last year’s mini-budget, blowing tens of billions of pounds on unfunded spending is just as dangerous as blowing tens of billions of pounds on unfunded tax cuts.”
In a direct pitch to voters, Mr Sunak said they could trust him on the economy as he brandished his background “working and investing in businesses large and small”.
“Whether you like me or not, I hope you know that when it comes to the economy, when it comes to your job, your family, your incomes, I’ll always take the right decisions for our country,” he said.
“So now you can trust me when I say that we can start to responsibly cut taxes.”
The Prime Minister also vowed to “clamp down” on welfare fraudsters as part of a drive to get more people into work, branding it a “national scandal” that around two million working-age people were not in employment.
“It’s not sustainable for the country, for taxpayers, it’s not fair,” he said, promising reform of the welfare system.
“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.”
Labour’s shadow chancellor of the Duchy of Lancaster and national campaign co-ordinator, 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.
“After 13 years of Conservative governments, working people have been left worse off and the Conservative economic record lies in tatters. Only Labour can get our economy growing and deliver change for working people.”