Rishi Sunak will promise to cut taxes in a keynote speech today, with the chancellor to hit out at “flippant” calls for him to slash taxes immediately without considering the effect on planned spending.
The chancellor will say at the annual Mais lecture that “I am going to deliver a lower tax economy, but I am going to do so in a responsible way” and that “cutting tax sustainably requires hard work, prioritisation, and the willingness to make difficult and often unpopular arguments elsewhere”.
Sunak is under pressure from Tory MPs, and the party faithful, to cut taxes and pursue less interventionist economic policies, after increasing the UK’s tax burden to its highest level in 70 years post-Covid.
This came off the back of record peacetime public spending during the pandemic, which inflated the UK’s 2020-21 Budget deficit to around £350bn.
Speaking at the lecture tomorrow, Sunak is expected to say: “I firmly believe in lower taxes.
“The marginal pound our country produces is far better spent by individuals and businesses than government.
“I am disheartened when I hear the flippant claim that ‘tax cuts always pay for themselves’. They do not. Cutting tax sustainably requires hard work, prioritisation, and the willingness to make difficult and often unpopular arguments elsewhere.”
The chancellor recently held firm, in the face of vocal Tory backbench opposition, on the decision to increase National Insurance by 1.25 percentage points from April in a £12bn-a-year tax grab.
He also last year announced hikes in Corporation Tax for the UK’s most profitable firms and stealth income tax increases.
Labour shadow chancellor Rachel Reeves said “the hard facts are that Sunak has hit households and business with 15 tax rises in two years in post”.
“It is because the Conservatives are the party of low growth, that they are now the party of high tax,” she said.