Hard work should be rewarded with tax cuts, says Rishi Sunak as he vows to fight back against Tory rebels

10 February 2024, 09:58 | Updated: 10 February 2024, 10:16

Rishi Sunak has said hard work should be rewarded with tax cuts
Rishi Sunak has said hard work should be rewarded with tax cuts. Picture: Alamy

By Emma Soteriou

Hard work should be rewarded with tax cuts, Rishi Sunak has said as he vowed to fight back against Tory rebels.

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Mr Sunak renewed his promise to slash taxes in the upcoming Spring Budget in a bid to win over voters ahead of the next general election.

It came after the publication of his own tax summary, which showed his UK tax bill was more than £500,000 last year, as his total income rose to £2.2 million.

Critics pointed out that he paid the same effective tax rate - about 23% of his annual income - as a teacher, despite raking in millions more.

It is due to the fact most of his earnings were in the form of capital gains, which is taxed at a lower rate than income.

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Official figures next week may show the UK slipped into a technical recession at the end of last year, going against the PM's pledge to grow the economy.

But he has remained optimistic, suggesting the UK could once again outperform expectations.

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"At the beginning of this year there is a sense that the country is pointing in the right direction," Mr Sunak told the Times.

"Because economic conditions have improved, because the plan is working, you are starting to see mortgage rates come down and we have been able to cut taxes.

"I do believe those pressures are starting to ease and that hopefully over the course of this year we can continue to make even more progress."

It comes after Chancellor Jeremy Hunt announced a cut in national insurance by two percentage points in November, from 12% to 10%.

But Mr Hunt last week sought to temper expectations about the size of tax reductions in his spring Budget, despite.

The PM was also cautious, saying: "None of us ever talk about this stuff before budgets.

"Other people are. I think they're over-interpreting. What the Chancellor and I have said is that of course our long-term plan is to cut people's taxes."

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Labour's shadow chief secretary to the Treasury Darren Jones said: "Rishi Sunak's words will ring hollow to the millions of families across Britain who have been left worse off after 14 years of Conservative failure.

"There have been 25 Tory tax rises since the election and the average household is set to be £1,200 worse off under Rishi Sunak's tax plan.

"It's time for a change and a Labour government with a plan to invest in Britain's future."

As well as facing other parties, Mr Sunak has also come under increased scrutiny from Tory rebels in recent months, particularly over his Rwanda migrant bill.

A new faction - dubbed the PopCons in Westminster - was launched by former PM Liz Truss earlier in the week, with her hitting out at hit out at Mr Sunak's government for failing to take on "left-wing extremists".

When asked about Tory rebels potentially plotting to oust him, Mr Sunak laughed and said: "I'm totally up for the fight."