13/02/24

UK: Sunak pledges tax cuts amid ‘improved economic conditions’

As published on: gg2.net, Tuesday 13 February, 2024. 

Rishi Sunak has embraced the challenge of narrowing the gap between the Tories and Labour in the current polls. Speaking to the Times, the prime minister emphasised his commitment to tax reductions, pledging to cut taxes when it becomes fiscally prudent.

“At the beginning of this year there is a sense that the country is pointing in the right direction,” he said attributing this optimism to the positive shifts in the economy and the effectiveness of his plan, which has already seen mortgage rates decrease and taxes cut.

Sunak is hopeful that the combination of a potential pre-election boost and a brighter economic forecast will diminish Labour’s lead under Keir Starmer.

His reiteration of tax cut promises follows revelations from publication of his own tax summary, which disclosed his payment of over £500,000 in UK taxes last year on a total income of £2.2m, The Guardian reported.

This level of taxation, roughly 23% of his income, has drawn criticism for being proportionally similar to what a teacher earns, despite Sunak’s income being significantly higher, primarily due to the lower taxation on capital gains.

Amidst expectations for substantial tax cuts in the upcoming spring budget, Chancellor Jeremy Hunt has been attempting to moderate these anticipations, even as calls for cuts grow louder within Tory circles.

Sunak maintains that detailed discussions on fiscal policies are typically reserved for budget announcements, suggesting that some might be reading too much into the current discourse. “What the chancellor and I have said is that of course our long-term plan is to cut people’s taxes.”

Responding to Sunak’s statements, Darren Jones, the shadow chief secretary to the Treasury, criticised them as insincere, pointing out the financial strain faced by many British families after 14 years of Tory governance.

Jones highlighted the 25 tax increases under the Tories and projected that households would find themselves significantly poorer under Sunak’s tax strategy, advocating instead for a Labour government focused on investing in the nation’s future.

Additionally, Sunak’s wealth has recently been under scrutiny, especially following his acceptance of a £1,000 wager with Piers Morgan regarding the government’s Rwanda asylum strategy.

The disclosure of his tax documents on Friday (9), revealing a 13% increase in his income to £2.2m and total earnings of about £7m over four years, has fuelled discussions about the fairness of the tax system.

Tax Justice UK’s executive director Robert Palmer commented on the disparity in tax rates between those earning from wealth versus those working for their income, calling attention to the systemic flaws in the current tax framework.

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UK Rishi Sunak Tax cuts