[UK] Chancellor ‘believes in lower taxes’ despite proceeding with April increase

Rishi Sunak, the UK Chancellor, has pledged to "deliver a low tax, higher growth economy" as he continues to face criticism from MPs over pending rises to National Insurance, BBC News reports.

On February 24, Mr Sunak told an audience at the Bayes Business School that he would cut taxes "sustainably".

His pledge comes as National Insurance rates are poised to rise from April 1 to help fund health and social care.

The rise means employees, employers and the self-employed will all pay 1.25p more in the pound.

"I am going to deliver a lower tax economy but I am going to do so in a responsible way, and in a way that tackles our long term challenges," Mr Sunak said in his speech.

"I firmly believe in lower taxes."

The chancellor also argued that taxes should not be cut if spending plans are unfunded.

Shadow chancellor Rachel Reeves said the Conservative Party was "now the party of high tax".

Ms Reeves said, "The chancellor may say he 'believes' in low taxes in his lecture - but the hard facts are that Sunak has hit households and business with 15 tax rises in two years in post - with an unfair National Insurance rise down the line.

"He has raised the most tax on average per budget than any chancellor in the last 50 years."

Labour Party leader Sir Keir Starmer was due to deliver a speech in Huddersfield outlining his party's approach to taxation and ending insecure employment but it was cancelled as a result of the Ukraine crisis.

Sir Keir reportedly intended to say that a Labour government would end the "economic fatalism" of the Conservatives and build "a new economy of security, where stable employment will be the bedrock of a better future for the next generation".

Mr Sunak said he was "disheartened when I hear the flippant claim that 'tax cuts always pay for themselves.'"

"They do not," he said. "Cutting tax sustainably requires hard work, prioritisation, and the willingness to make difficult and often unpopular arguments elsewhere."

In Mr Sunak's two years as Chancellor of the Exchequer, he has overseen hundreds of billions of pounds in COVID-related government spending through furlough payments, business grants and testing. Under his supervision taxation as a share of the economy has risen to its highest level since the 1950s.

The government's latest plans will see employees, employers and the self-employed all paying 1.25p more in the pound for National Insurance from April for a year.

When the year is up, the extra tax will be collected as a new Health and Social Care Levy.

Under the changes an employee on £20,000 a year pay an extra £89 in tax. Someone earning £50,000 will pay £464 more.

The Liberal Democrats and some backbench Tory MPs have called on the chancellor to scrap the incoming NI hike to ease the financial burden on households and businesses at a time of rising costs.

Mr Sunak also used his speech to set out his priorities to increase the UK's economic growth, arguing that "what government does is far less important than creating the conditions for private businesses and individuals to thrive".

Tony Danker - director-general of the CBI business group - said setting out how firms could "achieve sustainable growth for the long term" was "vital" at a period of volatility in the economy.

"Government enabling firms to invest, thrive and deliver prosperity is absolutely the right direction of travel," he said.

Mr Danker has called for a permanent "super-deduction" tax break to boost business investment in the UK.

Currently, the super-deduction allowance gives businesses investing in certain types of equipment, like machinery, a much higher tax reduction than usual but it will expire in March 2023.

Source: BBC News

(Quotes via original reporting)

Rishi Sunak, the UK Chancellor, has pledged to "deliver a low tax, higher growth economy" as he continues to face criticism from MPs over pending rises to National Insurance, BBC News reports.

On February 24, Mr Sunak told an audience at the Bayes Business School that he would cut taxes "sustainably".

His pledge comes as National Insurance rates are poised to rise from April 1 to help fund health and social care.

The rise means employees, employers and the self-employed will all pay 1.25p more in the pound.

"I am going to deliver a lower tax economy but I am going to do so in a responsible way, and in a way that tackles our long term challenges," Mr Sunak said in his speech.

"I firmly believe in lower taxes."

The chancellor also argued that taxes should not be cut if spending plans are unfunded.

Shadow chancellor Rachel Reeves said the Conservative Party was "now the party of high tax".

Ms Reeves said, "The chancellor may say he 'believes' in low taxes in his lecture - but the hard facts are that Sunak has hit households and business with 15 tax rises in two years in post - with an unfair National Insurance rise down the line.

"He has raised the most tax on average per budget than any chancellor in the last 50 years."

Labour Party leader Sir Keir Starmer was due to deliver a speech in Huddersfield outlining his party's approach to taxation and ending insecure employment but it was cancelled as a result of the Ukraine crisis.

Sir Keir reportedly intended to say that a Labour government would end the "economic fatalism" of the Conservatives and build "a new economy of security, where stable employment will be the bedrock of a better future for the next generation".

Mr Sunak said he was "disheartened when I hear the flippant claim that 'tax cuts always pay for themselves.'"

"They do not," he said. "Cutting tax sustainably requires hard work, prioritisation, and the willingness to make difficult and often unpopular arguments elsewhere."

In Mr Sunak's two years as Chancellor of the Exchequer, he has overseen hundreds of billions of pounds in COVID-related government spending through furlough payments, business grants and testing. Under his supervision taxation as a share of the economy has risen to its highest level since the 1950s.

The government's latest plans will see employees, employers and the self-employed all paying 1.25p more in the pound for National Insurance from April for a year.

When the year is up, the extra tax will be collected as a new Health and Social Care Levy.

Under the changes an employee on £20,000 a year pay an extra £89 in tax. Someone earning £50,000 will pay £464 more.

The Liberal Democrats and some backbench Tory MPs have called on the chancellor to scrap the incoming NI hike to ease the financial burden on households and businesses at a time of rising costs.

Mr Sunak also used his speech to set out his priorities to increase the UK's economic growth, arguing that "what government does is far less important than creating the conditions for private businesses and individuals to thrive".

Tony Danker - director-general of the CBI business group - said setting out how firms could "achieve sustainable growth for the long term" was "vital" at a period of volatility in the economy.

"Government enabling firms to invest, thrive and deliver prosperity is absolutely the right direction of travel," he said.

Mr Danker has called for a permanent "super-deduction" tax break to boost business investment in the UK.

Currently, the super-deduction allowance gives businesses investing in certain types of equipment, like machinery, a much higher tax reduction than usual but it will expire in March 2023.

Source: BBC News

(Quotes via original reporting)