Rishi denies 'gaslighting' Britons over 'tax cuts' claim

Rishi denies ‘gaslighting’ Britons over ‘tax cuts’ claim despite families facing being £1,100 worse off this year… as millionaire Chancellor says he ‘keeps it real’ by going to the cinema and clip and climb with his children

  • Rishi Sunak has denied ‘gaslighting’ Britons over his claim to be cutting taxes  
  • Tory MPs demanded the Chancellor goes further now on pledge to cut taxes 
  • Tax burden will reach its highest level as a proportion of GDP since the 1940s

Rishi Sunak has denied ‘gaslighting’ Britons by claiming he is cutting taxes amid rising Tory anger that the burden is heading to the highest level since the 1940s.

The Chancellor insisted he ‘always tries to be honest with people’ after experts pointed out average families face a £1,100 hit this year – and wealthier households will be £3,000 worse off – following his Spring Statement.

He also batted away criticism that as a multi-millionaire he cannot understand the experience of ordinary people, suggesting he ‘keeps it real’ by going to the cinema in Yorkshire and taking his children to clip and climb.    

Conservatives have been openly sniping at Mr Sunak in the wake of his mini-Budget. Total revenues flowing into the exchequer are forecast to reach a record £1.05trillion in 2023/24 – just ahead of the next election – up from £899.5billion this year and the equivalent of £42,000 per household. 

Speaking to Beth Rigby on Sky News, Mr Sunak defended his package when asked if he was ‘gaslighting’ the public by claiming to cut taxes. 

‘Families are struggling with the rising cost of lots of things and that’s why in the spring statement I wanted to make sure that we demonstrated we were on people’s side, and we announced the tax plan that will deliver the biggest net cut taxes, net cut to personal taxes in two years, in quarter of a century taken together,’ he said. 

Rishi Sunak (pictured on Sky News last night) insisted he ‘always tries to be honest with people’ after experts pointed out average families face a £1,100 hit this year following his Spring Statement

The OBR has warned that Britons face the sharpest fall in disposable incomes on record this year 

The Chancellor added: ‘I think what we’ve done is substantial. If you take together £9billion to help people with energy bills announced last month, the significant tax cuts that we announced yesterday, they will all help. But of course they can’t mitigate all the difficulties that high inflation is causing. No chancellor could do that.’

Asked how he ‘keeps it real’ despite being one of the wealthiest MPs with a billionaire father-in-law, Mr Sunak said: ‘Of course I go to the supermarket…

‘Teeside is on my back door. My kids were at the cinema at the weekend, we’re in Darlington, we’re in Stockton – we’re at the clip and climb there.

‘Those are the kinds of things that I’m doing on the rare chance that I have some time off with my kids.’

Mr Sunak was labelled a ‘fiscal illusionist’ by the Institute for Fiscal Studies (IFS) yesterday for claiming to have cut taxes when in he is ‘presiding over a very big increase’. 

One of the most significant revenue-raisers is Mr Sunak’s decision to freeze tax thresholds rather than increase them with inflation, meaning more are pushed into higher bands. 

The Resolution Foundation think-tank pointed out that this means only a tiny proportion will save money from the Chancellor’s pledge to cut the basic rate by 1p before the next general election. 

It predicted the average family will suffer a £1,100 real-terms hit in 2022-23, increasing to £3,200 for the top 10 per cent of working-age households 

Boris Johnson yesterday delivered a message by suggesting that the government will need to ‘do more’ on the cost of living, while the Chancellor has suggested he could offer more support before October when the energy price cap changes again. 

Many Tory MPs have been urging Mr Sunak to act sooner, after he banked much of a windfall from higher-than-expected growth and tax revenues in the current financial year.  

Former Brexit secretary David Davis said the Chancellor should have cancelled April’s national insurance hike, while Richard Drax told the Commons: ‘I just want to say to the Treasury bench, with the cost of living spiralling and taxes at the highest for 70 years, can I urge them to go further? As they know full well, lower taxes generate more cash. 

‘Low taxes are a force for good both for the individual, who is far better placed to decide where to spend their money, and for the private sector, which can better invest in their businesses, employ more staff and sustain a profit.’ 

Andrew Bridgen added: ‘You can’t tax your way to prosperity and it’s not the way to grow the economy. This is the highest burden since World War Two. 

‘The problem is, inflation is set to hit double digits and many households will tighten their belts and cut down their spending.’ 

Mr Sunak has announced a string of tax rises since becoming Chancellor in February 2020 – just before Covid-19 struck – including hiking corporation tax from 19 per cent to 25 per cent from April 2023, which will raise £17.2billion a year. 

National insurance will go up by 1.25 percentage points for employers and employees next month. 

Some of these hikes were offset by the Chancellor’s tax cuts this week but the IFS said the proposed cut in the basic rate of income tax ‘gives back only about half of the additional windfall’ Mr Sunak will get from freezing the thresholds. 

Mark Littlewood, director at the Institute of Economic Affairs, said: ‘The proportion of national income taken by tax is now at the highest level since Clement Attlee. We’re at the point where we have hit our taxable limits. What you’ll see is people retire early, not go for promotions or work overtime, or even take jobs in Singapore or New York. The Government is trying to please too many people.’ 

According to the OBR, total revenues will top £1trillion for the first time in 2023/24. 

These are made up mainly of taxes but include other receipts, such as selling off the Government’s stake in NatWest and dividends from investments. 

In 2023/24, the tax take will total £948.1billion, with the remainder of the £1.05trillion coming from these other receipts. 

In 2025/26, taxes alone will top £1trillion, taking the tax burden to 36.3 per cent of GDP, the highest since the late 1940s.

The tax burden will reach its highest level as a proportion of national income since Clement Attlee’s postwar Labour government.

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