Rishi Sunak has said the tax-cutting autumn statement is the “start of a journey”, as he appeared to signal hopes for future tax cuts next year.
In comments that will delight Tory MPs, the Prime Minister used an interview with the Mail on Sunday to claim that his Government will “do more when we can” on tax cuts.
Chancellor Jeremy Hunt announced a national insurance cut worth £10 billion as well as savings for businesses in his autumn statement this week.
While welcomed by businesses, economists have warned that his fiscal plans will result in painful and “implausible” savings for already-squeezed departments and public services beyond the next general election.
“I always said I wanted to cut people’s taxes, but first we had to get inflation under control and stabilise the economy,” Mr Sunak said.
“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.”
He added: “This is the start of a journey. We will do more when we can, because I want to cut taxes, reward hard work, grow the economy and do so in a way that is responsible.”
Despite the earnings bonus, millions of workers will face a squeeze on their finances with the tax burden still set to reach a record high.
The continuing freeze in personal tax thresholds will wipe out the benefit of the national insurance reductions for many workers, as higher earnings see millions pulled into paying more to the Exchequer through “fiscal drag”.
The Government has insisted that boosted productivity in the civil service can help deliver savings, but some commentators have warned that if implemented the Chancellor’s plan could usher back in an era of austerity.
We are at a point now where our priority going forward is to cut people's taxes— Prime Minister Rishi Sunak
Mr Sunak said: “People don’t want the Government to be spending ever more money. What they want are reformed public services that deliver for them, and high productivity.
“That’s what you get in the private sector, and we need to see that in the public sector. We are at a point now where our priority going forward is to cut people’s taxes.
“Public spending is already at record highs in this country, the Government is already spending an enormous amount of money.”
He said that the priority had to be “driving up public-sector productivity”.
