Rishi Sunak orders billions of pounds in tax cuts as he says it's time to ... trends now

Rishi Sunak orders billions of pounds in tax cuts as he says it's time to ... trends now
Rishi Sunak orders billions of pounds in tax cuts as he says it's time to ... trends now

Rishi Sunak orders billions of pounds in tax cuts as he says it's time to ... trends now

Rishi Sunak has ordered billions of pounds of tax cuts in a bid to boost the economy and turn the tide in next year's election.

In a two-stage package of reforms, Chancellor Jeremy Hunt will announce the first wave of tax cuts tomorrow, with more to follow in the Budget in March.

A Tory source said the Prime Minister had told colleagues that the Conservatives had to 'show, not tell' on tax cuts after raising the burden to record levels.

Mr Sunak yesterday hinted that he wanted to cut taxes on income to 'reward hard work', fuelling speculation that Mr Hunt is poised to announce a cut in National Insurance or income tax when he delivers his Autumn Statement on the economy tomorrow.

Cuts to business taxes are also expected as ministers try to boost investment and economic growth.

Chancellor Jeremy Hunt will announce the first wave of tax cuts tomorrow, with more to follow in the Budget in March

Chancellor Jeremy Hunt will announce the first wave of tax cuts tomorrow, with more to follow in the Budget in March

But the PM warned that the battered state of the public finances, coupled with continuing inflation problems, meant the shift to a lower tax economy would not be immediate.

In a major speech on the economy yesterday, he said: '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.'

Tory strategists believe that cutting tax is vital to reviving the party's hopes of winning next year's election. Mr Sunak repeatedly turned his fire on Labour yesterday, highlighting the party's controversial plan to borrow £28 billion a year to pay for green initiatives.

The PM said the scheme would heap debt on future generations and lead to 'permanently higher government', along with higher taxes and inflation.

At a press conference in London, the PM was tight-lipped about exactly which taxes will be cut in the Autumn Statement.

Whitehall sources said a sharp fall in inflation, coupled with better-than-expected economic forecasts, had convinced the PM and Chancellor that they had room to deliver personal tax cuts this week. Inflation fell to 4.6 per cent last month, meeting the PM's pledge to halve it this year.

Mr Sunak said this allowed the Government to move on to 'begin the next phase, and turn our attention to cutting tax'.

He added: 'My argument has never been that we shouldn't cut taxes. It's been that we could only cut taxes once we've controlled inflation and debt.' A one percentage point cut in National Insurance or income tax would save a worker on £30,000 almost £175 a year, while someone on a salary of £50,000 would save almost £375.

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