Sunak promises further tax cuts

There is “more to come” in terms of tax cuts following this month’s reduction in national insurance contributions, Rishi Sunak has signalled.

The Prime Minister urged voters to stick with his Conservative government as he insisted his economic plan is working ahead of a general election expected in the autumn.

Mr Sunak’s comments come after Chancellor Jeremy Hunt dropped further hints about a tax-cutting Budget while attending the World Economic Forum in Davos, Switzerland.

The Chancellor of the Exchequer said on Thursday that the “the direction of travel” was for the UK to emulate successful low-tax economies.

The Prime Minister said his administration had made clear it wanted “to cut taxes for future” fiscal events following the national insurance reduction that was announced in the autumn statement in November. He told broadcasters during a political visit to Eastleigh in Hampshire that he wanted to build a country where hard work is rewarded.

“I want people to have the peace of mind that the future is better for them,” he said. “And the fact that our plan is working, that we are now able to start cutting taxes because of our management of the economy.”

The main rate of national insurance was reduced from 12 per cent to 10 per cent, on January 6. The Treasury says the change means a worker on a £35,000 salary will be £450 better off a year.

Mr Sunak said it amounted to a “meaningful” tax cut for 27 million people in work following the cost-of-living crisis as he dangled the prospect of further giveaways during the spring Budget on March 6.

Mr Sunak was also asked about the surprise increase in UK inflation to 4% in December, up from 3.9% in November, marking the first increase since February last year.

The Prime Minister, who made halving inflation in 2023 one of his five pledges to the electorate ahead of the election, said other major economies had experienced similar upticks in inflation.

He said: “Inflation doesn't come down in a straight line. And like the US, France and Germany as well, everyone has ticked up a little bit in December. But the when I got this job, inflation was around 11 per cent, now it is 4 per cent, so it has more than halved.

“That didn't happen by accident. It is because we had a plan.we took difficult decisions which aren’t easy.”