Rishi Sunak has claimed “we are cutting taxes” even though the actual tax burden is set to rise to its highest ever level.
The prime minister said on Monday the “purest expression” of his ideology was that people “make far better decisions about their own money” than government.
“Make no mistake, we are cutting taxes,” he told a global investment summit in London. “We are cutting personal taxes for 27 million working people.”
Last week Jeremy Hunt used his Autumn Statement to announce the main rate of National Insurance will be cut from 12% to 10% and unveiled a package of business tax cuts.
But analysis by the independent Office for Budget Responsibility confirmed that the overall tax burden will hit a post-war high by the end of the 2020s because of huge rises in income tax revenues.
And the Institute for Fiscal Studies (IFS) said the overall tax burden would hit its “highest ever level”.
The respected independent think-tank said the National Insurance cut “pales into relative insignificance” when compared to the increase in personal taxes caused by the freeze in income tax thresholds.
Labour damned Sunak and Hunt’s Autumn Statement as “a Trojan horse packed with stealth taxes” which would leave the average household £800 worse off.
The Lib Dems accused the chancellor of a “hoax” on the public.
Asked this morning what metric the prime minister was using to claim taxes were low, Sunak’s spokesman said “overall” the UK was an attractive place for businesses to invest.
“This was an Autumn Statement that benefited business and helped to cut taxes for working people,” the PM’s spokesperson said. “We are in the middle off the pack I think in terms of taxation in the G7.”
