Chancellor must ‘get a grip’ on spending, argue campaigners

In his Spring Statement today, chancellor Rishi Sunak promised to cut the basic rate of income tax  from 20p in the pound to 19p in the pound during 2024- the year the next general election is currently scheduled for.

Sunak pointed out that income tax had only been reduced two times over the past two decades, which he said was proof that it was “hard to do”. He argued that “Covid and the war have made that harder”. He went so far as to say it would have been “irresponsible” to cut taxes this year, but that he “refused to let the ambition wither”.

Responding to the spring statement, John O’Connell, chief executive of free market campaign group the TaxPayers’ Alliance, said: “Taxpayers suffering through a cost of living crisis will welcome wins on fuel duty and income taxes.

“Soaring inflation has given the chancellor extra wiggle room, but this tax plan needs to come alongside an efficiency drive to eradicate waste and tackle the colossal cost of covid.

“Rishi must get a grip on spending if he wants to restore balance to the public finances while boosting growth and letting taxpayers keep more of their own money.”

“Though a cut in income tax is welcome, in reality the Treasury is taking with one hand to give away with the other.

“Cutting income tax down the line will be easily offset by the upcoming national insurance hike and freezing income tax thresholds, leaving taxpayers out of pocket overall.

“If the government wants to give taxpayers and businesses a respite from rises, they’d do well to simply scrap the health and social care levy.”

Sunak also said that 70 per cent of workers will receive an “effective tax cut” recommended by the Institute for Fiscal Studies (IFS), as he will increase the threshold for contributing to National Insurance (NI) by £3,000.

Responding to this news, John O’Connell, chief executive of the TaxPayers’ Alliance, said: “The alignment of income tax and national insurance is a welcome step to simplifying the tax system.

“The chancellor should take this chance to combine the two into a single income tax and offer a really radical reform of the tax code.”